According to news from the financial world on December 17, gold closed higher, ending this week’s volatility, but this week it still recorded a weekly decline due to the pressure of US interest rate hike expectations.
Gold for February delivery rose $12.40 to settle at $1,800.20 an ounce, or 0.7%. Prices based on the most-active contract ended the week down 0.6 percent. March silver rose 2 cents to $23.328 an ounce, or 0.1%, and ended the week down 1.6%.
Palladium for March delivery fell $107, or 5.9%, to $1,706.60 an ounce, a cumulative drop of more than 13% this week; platinum for January delivery fell $13.20, or 1.3%, to $1,000 an ounce, down 1.3% for the week 3.5%. March copper settled little changed at $3.7615 a pound, down 3% for the week.
Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, said gold prices “rebounded into the middle of the week on softer inflation data and expectations that the Fed will end raising interest rates soon.”
Gold rose to its highest level since June on Tuesday after November’s consumer price index (CPI) gave investors the impression that the worst inflationary wave in 40 years was continuing to ebb.
However, “a hawkish statement from the (Fed) late Wednesday weighed on gold as investors priced in higher terminal rates,” Haworth said. The Fed’s latest batch of economic projections shows that top Fed officials expect to keep interest rates above 5% through 2024.
Looking ahead, Haworth said rising interest rates and softer inflation data remain headwinds for gold investors.
Higher rates typically support the dollar and U.S. Treasury yields, making non-yielding assets such as precious metals less attractive by comparison.
Adrian Ash, head of research at BullionVault, said the surge in interest rates along with the greenback “reduced gold’s appeal as a non-yielding dollar hedge.”
Still, “the rebound in gold prices this year stands in stark contrast to the 2013 crash and the worst year ever for stock/bond portfolios.” Value is likely to gain attention around the new year, “partly because of seasonal rebalancing and partly because January is the Chinese New Year, which is now the most gold-buying holiday in the world.” These two factors mean that “gold typically Strong gains in January.”
Meanwhile, industrial metals such as copper are expected to end the year lower.
Looking ahead, though, CFRA Research equity analyst Matthew Miller is bullish on industrial metals and neutral to slightly bearish on precious metals. “As long as real yields are positive and rising, precious metals are likely to underperform,” Miller said.
Source: Financial WorldReturn to Sohu to see more
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