Gold Drops to Three-Month Low

Gold futures fell to a three-month low on Tuesday (May 10) as markets came under pressure from the dollar’s appreciation. This was compounded by fears that the U.S. Federal Reserve (Fed) will accelerate interest rate hikes.

  • The gold contract was down $17.6, or 0.95%, at $1,841 an ounce.
  • Silver was down 39.6 cents, or 1.81%, at $21.424 an ounce.
  • Platinum was up $8.7, or 0.93%, at $947.2 an ounce.
  • Palladium fell $17.80, or 0.86%, at $2043.70 an ounce.

Investors see gold as a hedge against inflation and a safe haven when markets face political and economic uncertainty. The Fed’s tendency to raise interest rates has overshadowed the positive factor. A rebound in interest rates will increase the opportunity cost of owning gold, as gold is an asset that does not earn interest.

The CME Group’s FedWatch tool indicates that investors now have a 75% expectation that the Fed will raise rates by 0.75% at its June 14-15 meeting, up from 19% the previous month.

The strengthening of the dollar also made dollar-denominated gold contracts more expensive for investors holding other currencies, with the dollar index against the six major currencies in a basket of currencies up 0.26. % to 103.9200

Investors are focused today on the U.S. consumer price index (CPI) for April. Meanwhile, analysts forecast that the CPI rose 8.1% in April from a year earlier. This is down from 8.5% in March, the highest level since December 1981.

The Spot Market is Open

Wednesday, May 11, 2022

Metals
Updated at
USD
Bid/Ask
Ounce
Change

Low/High
Gold
12.00
1,837.90
1,838.90
-0.10
-0.01%
1,831.50
1,840.90
Silver
12.00
21.44
21.54
+0.22
+1.04%
21.19
21.54
Platinum
12.00
974.00
984.00
+8.00
+0.83%
963.00
986.00
Palladium
10.15
1,988.00
2,138.00
+5.00
+0.25%
1,959.00
2,142.00
Rhodium
05.00
14,450.00
16,450.00
0.00
0.00%
14,450.00
16,450.00

Leave a Reply

Change Language
%d bloggers like this: