Business News Asia
Gold futures fell from the $1,800 level on Thursday (Jan. 27), pressured by the dollar’s appreciation. Concerns that the Fed may accelerate rate hikes to curb inflation and strong U.S. GDP numbers led to the drop.
- Gold fell $36.6, or 2%, at $1,793.1 per ounce.
- Silver contract was $1.131, or 4.75%, to close at $22.676 an ounce.
- Platinum contract was down $24.1, or 2.3%, at $1,021.8 per ounce.
- Palladium futures were up $15.90, or 0.7%, at $2,366.50 an ounce.
Gold contracts were put under pressure by the appreciation of the dollar. The dollar index rose by 0.7% against the six major currencies in a basket of currencies.
Gold markets were hit by concerns about a Fed rate hike after the Fed chairman issued a statement following Wednesday’s meeting:
“There is still a possibility that the Fed will raise interest rates without affecting the labor market. And the Fed does not deny the possibility of a rate hike of more than 0.25% considering the very high inflation figures at the moment.”
Traders are selling gold as a safe haven after the U.S. Commerce Department announced that U.S. GDP rose 6.9% in the fourth quarter, with the U.S. economy driven by consumer spending and increased exports. But the figures should also be taken with some caution as the increase was also due to investment in inventory. This could put downward pressure on future GDPs.
U.S. GDP grew 5.7% in 2021, the highest since 1984, after contracting 3.4% in 2020, the largest decline since 1946 due to the impact of COVID-19.
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