Gold price Regains Ground as US dollar rally cools
Gold prices regained some ground on Wednesday 8th Mar as the dollar’s rally cooled, but any further advance is likely to be capped with Federal Reserve Chair Jerome Powell signaling more rate hikes.
Spot gold rebounded 0.3% to $1,820.31 per ounce by noon ET, after shedding nearly 2% in the previous session. US gold futures ticked 0.1% higher to trade at $1,822.90 per ounce in New York.
Meanwhile, the US dollar eased from multi-month highs, making bullion cheaper for overseas buyers.
“Gold can rally a lot more on any dovish data than it can fall on any hawkish data that reaffirms Powell’s comments,” Nicky Shiels, head of metals strategy at MKS PAMP SA, said in a Reuters note.
The Fed will be likely to need to raise rates “more than expected” in response to recent strong data and is prepared to move in larger steps if the “totality” of incoming information suggests tougher measures are needed to control inflation, Powell stated on the first day of his two-day testimony before Congress.
He then followed that up on Wednesday by stating officials have not yet made a call on the size of the rate increase “they’re almost certain to deliver at their upcoming meeting.”
“Gold will trade defensively, likely straddling $1,800 into the March FOMC as Powell created uncertainty over both the size and end of rate hikes,” Shiels predicted, adding that the Fed speeding up hikes put a short-term cap on pricing and sentiment.
“There are still several more event-driven risks the gold market needs to absorb – Powell today, jobs data on Friday, CPI on Tuesday,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
SOURCE:mining.com
