Mining
Friday, June 24th, 2022 8:23 am EDT
[Click here for an interactive chart of gold prices]
“There are a confluence of forces that are driving gold prices in both directions, forcing it to remain in a small range,” said TD Securities’ commodity strategist Daniel Ghali in a Reuters note.
“We have risks of a recession and signs of an imminent slowdown in global growth driving inflows into gold as a safe haven. On the other hand we have Fed’s committed to fighting inflation, contributing to a significant rise in real rates,” Ghali added.
St. Louis Fed President James Bullard said earlier that the US central bank must act boldly in raising interest rates to contain inflation, which would further increase the opportunity cost of holding bullion.
“We do think that gold has some minor upward potential in the second half of the year, forecast is for $1,900,” said Commerzbank analyst Carsten Fritsch.
However in the short term, the Fed will hike rates aggressively, providing some headwinds for gold, Fritsch added.
In the physical gold market in Asia, dealers offered bigger discounts in India this week to lure buyers as the wedding season concluded, while some consumers in China bought bullion to hedge against economic concerns.
(With files from Reuters)
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