CGC Stock – PRECIOUS-Inflation worries keep gold steady after Fed maintains stance
* Fed committed to support economy until recovery is more
* Investors expect Fed to raise rates by January 2022 –
* SPDR Gold holdings slip on Wednesday
(Adds comments; updates prices)
By Diptendu Lahiri
April 8 (Reuters) – Gold prices steadied after early falls
on Thursday, as market participants weighed the U.S. Federal
Reserve’s commitment to keep interest rates low for some time
against likely higher inflation.
Spot gold was flat at $1,737.89 per ounce by 0407
GMT. U.S. gold futures fell 0.1% to $1,739.20 per ounce.
Fed officials are committed to supporting the economy until
its recovery is more secure, minutes of the U.S. central bank’s
most recent policy meeting released on Wednesday showed.
“The Fed was very assuring about its stand on interest
rates, although investors are not convinced,” said Michael
McCarthy, chief market strategist at CMC Markets.
“Investors are expecting the Fed will have to hike interest
rates as early as January 2022 as it becomes a huge task once
inflation starts going out of control.”
Several policymakers at the Fed’s March 16-17 meeting
indicated they thought interest rates might need to increase
sooner than anticipated by the bulk of their colleagues, and
perhaps as soon as next year, the minutes showed.
Non-yielding gold tends to fall out of favour when interest
rates rise, as it increases the opportunity cost of holding
Recent economic data have indicated a faster turnaround from
the pandemic impacts and boosted risk assets. U.S. stock futures
nudged higher to hit a record on Thursday, weighing on gold’s
safe-haven appeal. [MKTS/GLOB]
In the near term, gold has support at $1,727 and $1,720
levels, followed by $1,705, OANDA senior market analyst Jeffrey
Halley said in a note.
SPDR Gold Trust , the world’s largest gold-backed
exchange-traded fund, said its holdings fell 0.35 tonne to
1,028.69 tonnes on Wednesday. [GOL/ETF]
Lending support to gold, the U.S. dollar tracked Treasury
yields lower and traded near a more than two-week low versus
major peers on Thursday. [USD/] [US/]
Among other metals, silver fell 0.1% to $25.09 per
ounce and palladium was down 0.3% to $2,614.98. Platinum
rose 0.6% to $1,232.99.
(Reporting by Diptendu Lahiri in Bengaluru; editing by
Uttaresh.V and Subhranshu Sahu)
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