Gold Closes Down $3 as Dollar Strengthens – Fed Statements Point to Aggressive Interest Rate Policy

Gold futures closed lower on Wednesday (May 18) as the markets were pressured by the appreciation of the dollar. Also, the fact that Federal Reserve Chairman Jerome Powell insisted that the Fed would not hesitate to raise interest rates as much as necessary to contain inflation.

  • The gold contract was down $3, or 0.16%, at $1,815.9 per ounce.
  • Silver was down 20.6 cents, or 0.95%, at $21.544 an ounce.
  • The platinum contract was down $19, or 2.01%, at $924.40 an ounce.
  • Palladium fell $39.60, or 1.94%, at $1,992.60 an ounce.

Powell gave a speech Tuesday at the Future of Everything Festival seminar in which he said the Fed will not hesitate to raise interest rates as much as necessary to prevent inflation from rising so high that it damages the economic foundation

“What we want to see is a clear slowdown in inflation and we will continue to tighten our monetary policy until we see that. If we don’t see inflation slowing down as expected. We will use a more aggressive monetary austerity policy,”

Powell said.

The CME Group’s FedWatch tool indicates that investors now have a 100% expectation that the Fed will raise interest rates by at least 0.50% at two more monetary policy meetings in June and July. Previously, when the Fed raised rates by 0.50% in May, it was the largest rate hike in more than 20 years.

In addition, the strength of the dollar continues to push down the price of gold. The dollar index against the six major currencies in a basket of currencies rose 0.43% to 103.8100.

The Spot Market is Open

Thursday, May 19, 2022

Metals
Updated at
USD
Bid/Ask
Ounce
Change

Low/High
Gold
12.00
1,815.40
1,816.40
-1.50
-0.09%
1,813.90
1,818.70
Silver
12.00
21.42
21.51
+0.03
+0.14%
21.25
21.58
Platinum
12.00
929.00
939.00
-5.00
-0.54%
923.00
945.00
Palladium
11.50
1,957.00
2,107.00
+15.00
+0.77%
1,926.00
2,110.00
Rhodium
05.00
14,700.00
16,700.00
0.00
0.00%
14,700.00
16,700.00

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