Gold falls as dollar checks slide, Fed chief hardens policy stance

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The price of gold fell on Wednesday as the

dollar recovered slightly, increasing the pressure on the dollar exchange rate

precious metal along with solid Treasury yields and an aggressive

inflation view of the head of the US Federal Reserve.

Spot gold fell 0.4% to $1,808.08 an ounce, with

0329 GMT. US gold futures fell 0.6% to $1,807.10.

Gold has been consolidating since late last week, but

the general direction is down, towards about $1,750, Ilya . said

Spivak, a currency strategist at DailyFX. “The question is when?

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do we find a new momentum to take us there?” said Spivak.

The dollar rose higher after a three-session slide,

increasing the appeal of gold for investors with other


Gold is very focused on rates and the outlook for monetary money

policy, especially in the US,” Spivak said, adding that the

dollar wasn’t done rallying.

Fed Chair Jerome Powell promised on Tuesday that the U.S

central bank would raise interest rates as high as necessary to

kill a rise in inflation that he said threatened the foundation?

of the economy.

Benchmark yield on 10-year US Treasuries stable after a

strong rise in previous session, hurtful demand for

zero yield gold.

The Fed has raised its key rate by

three quarters of a percentage point this year, and on track

to increase it again in half percentage point increments on its

next two meetings in June and July.

Though viewed as an inflation hedge, precious metal is prone to:

rising US short-term and bond yields, which

increase the opportunity cost of keeping it.

Spot silver fell 0.7% to $21.46 an ounce, platinum

fell 0.6% to $945.37 and palladium fell 1% to


(Reporting by Bharat Govind Gautam in Bengaluru; Editing by

Subhranshu Sahu)

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Amanda Peterson: Amanda is an economist turned blogger who provides readers with an in-depth look at macroeconomic trends and their impact on businesses.

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