Gold hugging close to $2000 an ounce, settling into a tight range near that psychological line even as the dollar firmed, gaining strength as investors bet on a pause in U.S. rate hikes.
The yellow metal is up for the week following comments from Federal Reserve Chairman Jerome Powell on Wednesday indicating that the central bank might pause interest rate increases after recent bank collapses. The Fed raised rates by another 25 basis points Wednesday, and the Bank of England raised rates by 25 basis points Thursday. Any pause or halt in rate hikes would be seen as supportive for the precious metal since higher interest rates are typically bearish for gold.
Powell noted in a news conference following the Fed’s rate decision that policymakers considered pausing rate hikes – which are being implemented to curb high inflation – because “events in the banking system over the past two weeks are likely to result in tighter credit conditions.”
June gold futures gained 2.4% Thursday to settle at $2,013.30 an ounce on Comex, and the front-month contract is up 1.2% so far this week. Bullion decreased 5.6% last month, its worst performance since June 2021. It increased 6.5% in January and gained 3.8% in December. The metal fell $2.40 in 2022. The June contract is currently up $6.30 (+0.31%) an ounce to $2019.60 and the DG spot price is $2000.10.
About 63.9% of investors tracked by the CME FedWatch Tool are betting that the Fed will leave interest rates unchanged at the Fed’s next policy meeting in May, while 36.1% anticipate a 25 basis point increase. The Fed has raised rates by 25 basis points twice this year following rate hikes of 50 basis points in December and 75 basis points each in June, July, September and November. The Fed indicated Wednesday that it wouldn’t look to cut interest rates this year, however.
Gold got some support from haven investors over the past couple of weeks after the collapse of Silicon Valley Bank triggered a global banking crisis.
Silver May futures gained 2.1% Thursday to settle at $23.26 an ounce on Comex, and the metal is up 3.5% so far this week. Silver retreated 12% last month after falling 0.8% in January and rising 10% in December. It advanced 3% in 2022. The May contract is currently up $0.319 (+1.37%) an ounce to $23.575 and the DG spot price is $23.47.
Spot palladium slid 0.4% Thursday to $1,456.50 an ounce. It’s up 1.9% this week. Palladium plummeted 14% in February after dropping 7.4% in January and retreating 4% in December. It lost 5.7% in 2022. The current DG spot price is currently down $5.30 an ounce to $1460.00.
Spot platinum rose 0.4% Thursday to $991.40 and is up 1% this week. Platinum retreated 5.9% in February after falling 4.3% in January and gaining 3.4% in December. It surged 10% in 2022. Currently, the DG spot price is down $11.60 an ounce to $984.30.
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