Gold Price Scales $1,850 as Dollar Eases Following Fed Rate Hike

Gold reached skyrocketing prices on Thursday as an easing dollar enabled offsetting pressure from the hefty interest rate hike by the US Federal Reserve formerly. 

Spot Gold was up 0.09% to $1,850.98 (USD) per ounce by 1:00 pm. ET, hitting the $1,850 mark for the first time since the previous week. US gold futures had a more substantial yield of 1.9%, trading at $1,853.80 per ounce in New York. 

Furthermore, Buoying gold’s appeal among overseas customers is the abrupt decline in the US dollar, which recently hit its highest in two decades.  

A Fed that is apparently committed to staving off inflationary pressures by boosting rates is a bit of a spoilsport on gold, keeping it choppy and in a range.” David Meger, director of metals trading at High Ridge Futures. 

On Wednesday, Bullion increased as much as 1.9 as the dollar reverted after the Fed approved its most significant interest rate increase since 1994. but articulated that such steep hikes might not be standard. 

In addition, the consideration of surging inflation also provoked other central banks to tighten monetary policies. The Swiss National Bank unexpectedly extended its policy rate for the first time in 15 years. Furthermore, The Bank of England is also raising rates currently.

Carsten Menke, head of Next Generation Research at Julius Baer, said that the gold’s safe-haven demand could vanish further if the Fed successfully combats inflation without thrusting the US into a recession.

In a note, TD Securities said that entity trading consultant liquidations could possibly continue to weigh on the yellow metal, rising pressure on this comrade to liquidate their longs.

This week, Goldman Sachs modified its short-term gold price targets, mentioning a significant “wealth shock” following the monetary impact of the lockdowns in China. Still, the bank retained its upside stance on the safe-haven metal.