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Mohamed Mohamoud

Author and the owner of idman news

June 27, 2022

Idman news

Wararka Jaraaidyada Soomaalida ay qoreen

Gold pulls back from 2-month high as investors await Fed decision

Gold futures on Wednesday were pulling back from their highest values in two months ahead of a policy statement from the U.S. Federal Reserve.

“Gold is continuing to hold up ahead of the Fed meeting, close to $1,850 where it has seen some resistance recently,” wrote Craig Erlam, senior market analyst at Oanda Corp., in a Wednesday research note.

February gold


was trading $9.70, or 0.5%, lower at $1,842.90 an ounce, following a 0.6% rise for the precious metal in the previous session, which marked the highest settlement for a most-active contract since Nov. 18, FactSet data showed.

The central bank’s policy-setting Federal Open Market Committee later Wednesday is expected to lay the groundwork for an interest rate increase in two months, and policy makers also may discuss how fast it will shrink its $9 trillion balance sheet once it is ready to do so.

The Fed will release its policy statement at 2 p.m. Eastern Time, a half-hour after the market for gold on Comex settles, with Chairman Jerome Powell scheduled to hold a news conference at 2:30 p.m. after the central bank’s announcement.

“The central bank will have a big role to play on whether the yellow metal breaks above here or below $1,830 support,” Erlam wrote.

This week, gold has drawn safe-haven bids amid wild swings in values for stocks and geopolitical tensions in Europe, where there are fears about the annexation of Ukraine by Russia, but it has also been bid up amid concerns about uncertainties around the Fed’s policy plans.

Gold theoretically should benefit from rising inflation concerns because it is viewed as a hedge against pricing pressures but the prospect of rising rates is a negative for precious metals which don’t offer a coupon.

Worries about the damaging effects rising interest rates could have on nonyielding bullion buying have been seen as a one of the main bearish near-term drivers for gold, keeping prices in check.

“The lack of a more sustained breakout can be attributed to two factors: the likelihood of rising interest rates punishing gold for its lack of yield,” wrote Rupert Rowling, market analyst at Kinesis Money, in a daily note.

The 10-year Treasury note yield

was at around 1.79% on Wednesday and the dollar was up 0.2%, per the U.S. ICE Dollar Index
providing additional headwinds for bullion, which tends to be priced in dollars.

Meanwhile, March silver

was trading a penny, or less than 0.1%, higher at $23.91 an ounce, following a 0.4% rise on Tuesday.


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Lasoco xaaladda EAST AFRICAN COUNTRIES ugu danbaysay ee Xanuunka CORONAVIRUS .