Gold recovers some losses despite expectations of US rate hike in December
Press coverage 2 newspapers covered this event: Al-Seyassah · Al-Wasat →
Gold prices rose slightly after a previous decline, but expectations of a US rate hike in December limit gains.
Translated by Qiyas from السياسة — Original source
Gold prices rose on Wednesday after falling about 3 percent in the previous session, although gains in the precious metal remained limited due to growing expectations that the US Federal Reserve will raise interest rates next month, following the release of inflation data that exceeded forecasts.
Reuters reported that gold rose 0.3 percent in spot trading to $4,044.56 per ounce by 04:51 GMT, after dropping to $4,017.21 on Tuesday.
US December gold futures rose 0.6 percent to $4,052.50 per ounce.
Matt Simpson, chief market analyst at StoneX, said the price increase reflected a technical recovery after gold suffered sharp losses in the previous session, as investors who had bet on lower prices took profits, awaiting new catalysts for market moves.
He added that higher-than-expected US inflation data and comments from Federal Reserve officials calling for tighter monetary policy had reinforced expectations of further interest rate hikes.
Market expectations for a US interest rate increase in December rose to 100 percent, compared with about 84 percent before the inflation data was released, according to the CME Group’s FedWatch tool.
Higher interest rates typically reduce gold’s appeal, as it yields no return, thereby increasing the opportunity cost of holding it.
In other precious metals, spot silver rose 2 percent to $52.52 per ounce, while palladium climbed 1.8 percent to $1,042.87.
