Gold Rebounds as Dollar Weakens Despite Fed’s Hint at Rate Hikes

dollar rebound

Gold experienced a rebound early on Thursday, recovering from a streak of eight consecutive days of losses. This resurgence was driven by the weakening of the dollar, despite the emergence of minutes from the Federal Reserve’s most recent policy meeting. These minutes hinted at a potential increase in interest rates in the future.

Gold Rebounds as Dollar Weakens Despite Fed's Hint at Rate Hikes

For the December delivery, the value of gold rose by US$2.10, reaching US$1,930.40 per ounce.

This upward movement in gold prices coincides with a decline in the dollar’s strength, which had reached its highest point since mid-June. Even in light of the revelations within the Federal Open Market Committee’s minutes, which highlighted the policymakers’ concerns regarding inflation and their potential inclination to raise rates, the dollar’s performance faltered. The ICE dollar index recorded a decrease of 0.28 points, settling at 103.15.

Saxo Bank offered insight, stating, “The FOMC minutes displayed a subtly hawkish tone, leaving ample room for additional rate hikes. Increased yields and the USD achieving its highest point in two months had a dampening effect on investor appetite for the precious metal. Furthermore, more positive-than-anticipated economic data has contributed to reduced demand for safe-haven assets.”

The situation in the treasury market demonstrated a mix of outcomes. The two-year note saw a decrease of 2.5 basis points, leading to a yield of 4.94%. Conversely, the yield on the 10-year note climbed by 3.4 basis points, reaching 4.29%.

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