Gold prices fell today, Thursday, affected by expectations of a sharp increase in interest rates, after Jerome Powell, Chairman of the Federal Reserve (the US Central Bank), reiterated the bank’s commitment to combating inflation.
And gold fell in spot transactions 0.2% to $ 1832.91 an ounce (an ounce) by 02:39 GMT, and US gold futures fell 0.2% also to $ 1834.30.
“With Jerome Powell indicating that percent hikes are indeed possible, this was a reminder of the continued pressure on gold prices from higher interest rates,” said Michael McCarthy, chief strategist at Tiger Brokers in Australia.
A member of the US Senate Banking Committee asked Powell if the Federal Reserve might raise interest rates by up to 100 basis points at once, and said he would never rule out anything, and that central bank officials would take all necessary steps to restore price stability.
Gold is usually seen as a hedge against inflation and a safe haven during economic crises, such as a recession.
Higher interest rates and bond yields increase the opportunity cost of owning the non-yielding yellow metal.
The dollar stabilized at high levels after incurring some losses in the previous session, which reduced the demand for gold priced in the US currency among buyers of other currency holders.
As for other precious metals, silver fell 0.5% in spot transactions to $21.28 an ounce, and platinum fell 0.3% to $923.62, while palladium settled at $1864.18.