By : Franyi Sarmiento, Ph.D., Inspenet, July 28, 2022
The price of gold rose this week helped by the dollar’s decline, but caution over the Federal Reserve’s monetary policy tightening plan keeps bullion prices in a narrow range.
Spot gold rose 0.2% to $1,720.57 per ounce, while U.S. gold futures rose just 0.17% to $1,720.7.
According to information from Reuters, the dollar fell, increasing the attractiveness of gold among buyers who have other currencies.
The market is expecting the US central bank to raise interest rates by another 75 basis points (bps) at the end of its two-day policy meeting.
Although considered a hedge against inflation, raising interest rates to tame rising prices increases the opportunity cost of holding bullion, which doesn’t pay off.
It is worth mentioning that gold has lost more than USD 300 since breaking above the USD 2,000 per ounce level in early March 2022, due to the Fed’s rapid rate hikes and the recent rally in the dollar, which, in turn, according to Reuters, has affected bullion’s appeal as a safe haven despite recession risks.
Meanwhile, spot silver rose 0.8% to $18.75 an ounce, platinum gained 0.4% to $877.52 and palladium gained 1.1% to $2,031.65.
This material from the ValoraAnalitik portal was edited for clarity, style and length.
Source : https://www.valoraanalitik.com/2022/07/27/precio-oro-sube-debilidad-dolar-mercados-espera-fed/
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