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Gold slides to over 1-month low after Fed's hawkish tilt

Reuters2021-06-17

* Fed now projects first rate hike in 2023

* U.S. dollar advances to two-month peak

* Gold fell over 2.5% post Fed announcements on Wednesday

June 17 (Reuters) - Gold fell to its lowest in more than a month on Thursday, pressured by gains in the dollar and U.S. Treasury yields after the Federal Reserve signalled earlier-than-expected interest rate increases.

A majority of 11 Fed officials projected at least two quarter-point rate rises for 2023, even as officials in their statement pledged to keep policy supportive for now to encourage a jobs recovery.

Spot gold fell 0.4% to $1,804.40 per ounce by 0904 GMT, having touched its lowest since May 6 at $1,799.70.

U.S. gold futures were down 3.1% to $1,804.20.

Analysts attributed a slight bounce during the Asian session to bargain hunting following Wednesday's steep retreat toward the key $1,800 level.

Along with the Fed's unexpected change of stance, "higher interest rates in the U.S. - while other major central banks probably are going to wait longer with changing monetary policy - has strengthened the dollar. So it's a double whammy for gold," Quantitative Commodity Research analyst Peter Fertig said.

Higher interest rates tend to dull gold's appeal as they translate into a higher opportunity cost of holding bullion.

Gold slipped more than 2.5% on Wednesday, after comments from Fed officials propelled the dollar to a two-month high, while U.S. Treasury yields also jumped.

Adding to gold's headwinds, the U.S. central bank also signalled it would now be considering whether to taper its asset purchases meeting by meeting and downgraded the risk from the coronavirus pandemic given progress in vaccinations.

However, there is the prospect of support for gold, said Alexander Zumpfe, senior precious metals trader at Heraeus.

"If the economic recovery that is just beginning leads to further rising prices, this should also support the yellow metal," Zumpfe said.

Prices should find initial support at $1,796, Zumpfe said.

Silver fell 0.9% to $26.73 per ounce, while palladium dropped 1.1% to $2,765.33 and platinum inched 1.3% lower to $1,107.36.

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Comment12

  • Melodykjh
    ·2021-06-18
    Hh
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  • Angel686868686868
    ·2021-06-17
    What happen
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  • LEEKT
    ·2021-06-17
    [正經] 
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    • LEEKT
      [微笑]
      2021-06-18
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  • Clemperor
    ·2021-06-17
    2022 would be a fairer expectation 
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  • Jasonlim
    ·2021-06-17
    Sold 2weeks back.
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  • Brugelion
    ·2021-06-17
    Buy the dipLike and comment pls
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    • Brugelion
      Thks
      2021-06-17
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    • Piggu
      OK, pls reply too
      2021-06-17
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  • Ice_JR
    ·2021-06-17
    Ok
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    • Samwich
      Ok
      2021-06-17
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  • Olympous
    ·2021-06-17
    Ok
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  • Lawrence88
    ·2021-06-17
    Old comments back 
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    • Aldrin
      comment
      2021-06-17
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    • Olympous
      ok
      2021-06-17
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  • Lionel83
    ·2021-06-17
    Will bounce back with the uncertainty 
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    • Lawrence88
      good please comment back
      2021-06-17
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  • DengXH
    ·2021-06-17
    Like
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  • LEEQF
    ·2021-06-17
    Like my comment pls
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    • Slmh
      ??
      2021-06-17
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