Gold Edges Up As Expectations Firm For Super-Sized Fed Rate Hike
Bullion has been hovering around $1,700, which one senior market analyst has described as a “danger zone” as it could lose investor support should if fall below that level.
(Bloomberg) -- Gold edged up after another brush with the $1,700 an ounce mark, as expectations firmed for a super-sized interest rate rise when the Federal Reserve meets later this month.
Bullion has been hovering around $1,700, which one senior market analyst has described as a “danger zone” as it could lose investor support should if fall below that level. It’s on track to end the week flat, following three consecutive weekly declines.
Federal Reserve Chair Jerome Powell said Thursday the Fed needed to “act now” and “forthrightly” to bring inflation under control, boosting the prospect of a 75 basis point hike when it meets on Sept. 21-22. Expectations also grew that the European Central Bank will lift rates by the same amount in October.
The sell-off of the policy-sensitive two-year Treasuries continued to push yields up to 3.51%, close to their highest level since 2007. Elevated yields tend to weigh on non-interest bearing bullion. The US dollar kept its long run of gains against other major currencies intact.
Spot gold was trading up 0.2% to $1,711.46 an ounce at 8:14 a.m. in Singapore, after falling 0.6% in the previous session. The Bloomberg Dollar Spot Index fell 0.2%. Silver gained, while platinum and palladium were steady.
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