©Reuters.
Investing.com – It fell off its 2-and-a-half-month high on Monday as comments from some insiders suggested the bank will continue to act aggressively against inflation, while rates fell slightly as investors reaped big gains from last week.
right now
Gold fell during these trading moments on Monday, the start of the week’s trading, by more than $11, or the equivalent of 0.7%, to levels as low as $1,757.99 an ounce.
On the other hand, futures contracts on the yellow metal have now fallen by more than 6 dollars an ounce, or 0.4%, to levels of 1761 dollars an ounce.
Bullion prices posted their best week in 30 months after a lower-than-expected US inflation reading for October fueled hopes the Fed will ease its hawkish stance in the coming months and ease pressure on metals markets by higher interest rates.
But the yellow metal is still down for the year, with prices down significantly from their yearly highs above $2,000. The metal has lost its safe-haven status and has also largely failed as an inflation hedge this year, as rising interest rates have made it more expensive to hold unprofitable assets.
Alferdaly drops gold
Expectations that the Fed will raise interest rates by 50 basis points in December also increased significantly after the reading, with the market standing about an 81% chance of pricing in a rate hike.
But Fed Governor Christopher Waller said Sunday that while the Fed considers a slower pace of rate hikes, it shouldn’t be seen as a setback in its fight against inflation.
While the inflation reading for October was more moderate than expected, it was well above the Fed’s annual target of 2%. This is likely to prompt the Bank to continue raising interest rates, until it sees clear signs of lower inflation. Higher interest rates are expected to affect metals markets in the near term.
other metals
Among the industrial metals, copper prices fell from their highest level in nearly five months as investors cashed in on the profits from last week’s rally.
Copper futures fell 0.1% to $3.9322 a pound, after surging more than 12% over the past two weeks. Sentiment towards the red metal was also significantly boosted by China, the world’s largest importer, which scaled back some anti-Covid measures for the first time ever.
Markets are now pricing in a possible reopening in China in 2023, which should boost copper demand. Supply of the red metal is also expected to contract in the coming months due to turmoil at major producers in Chile and Peru.
