© Reuters. Gold bars at a gold and silver factory in Switzerland on July 13, 2022. Photo: Dennis Balibus – Reuters.
(Reuters) – It fell sharply on Friday, after hitting its highest level in more than a year in the previous session, as the dollar rose and after a Federal Reserve official indicated the need to raise interest rates again.
It fell 2.1 percent to $1,996.09 an ounce by 12:03 a.m. EDT. US gold futures fell 2.2 percent to $2,009.80.
It rebounded from a one-year low and yields rose after a senior US central bank official warned of the need for the bank to keep raising interest rates to rein in inflation.
Gold competes with the dollar as a safe haven amid economic or political turmoil, while the rise in the US currency leads to a decline in demand for the precious metal from buyers holding other currencies.
Daniel Pavilonis, chief market strategist at RJO Futures, said the metals market is likely to decline ahead of the US Federal Reserve’s interest rate decision in May, with expectations of a 25 basis point hike.
“Prices will stabilize near the level of approximately $2,000,” he added.
However, analysts say that the prospects for the precious metal remain positive, after its significant rise in the past two sessions, amid growing fears of a recession that may push the US central bank to end the rate-raising cycle.
“I still expect prices to hit record highs and continue to rise to $2,100,” said Philip Stripel, chief market strategist at Blue Line Futures in Chicago.
And for other precious metals, it fell in spot transactions by 2.1 percent to $ 25.25 an ounce, after it recorded the highest level in a year at $ 26.07 earlier in the session and is heading towards recording gains for the fifth consecutive week.
Platinum fell 0.7 percent to $ 1,040.07, while it rose 0.9 percent to $ 1,512.88, and the two metals are also heading to record weekly gains.
(Prepared by Mahmoud Abdel-Gawad for the Arabic Bulletin)
