Gold Rebounds 2% as Investors Reassess Fed Rate Hike
Gold climbed 2% to around $4,360 an ounce on Thursday, recovering from a near six-week low touched on Wednesday, as investors reassessed their positions following the US Federal Reserve’s first rate hike in three years. The dollar retreated from a seven-week high reached after US policymakers raised rates and signaled further hikes in the coming months, with Chief Kevin Warsh joining the unanimous decision and underscoring policymakers’ concerns that inflation remains elevated. While gold is traditionally viewed as a hedge against inflation, higher interest rates tend to reduce its appeal by increasing the attractiveness of interest-bearing assets. Elsewhere, the Bank of England kept interest rates unchanged on Thursday, while the Bank of Japan is widely expected to raise rates to a 31-year high on Friday. Elsewhere, oil prices extended their decline as concerns over supply disruptions eased, while US President Trump said he hoped an end to the war with Iran was near.
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Gold climbed 2% to around $4,360 an ounce on Thursday, recovering from a near six-week low touched on Wednesday, as investors reassessed their positions following the US Federal Reserve’s first rate hike in three years. The dollar retreated from a seven-week high reached after US policymakers raised rates and signaled further hikes in the coming months, with Chief Kevin Warsh joining the unanimous decision and underscoring policymakers’ concerns that inflation remains elevated. While gold is traditionally viewed as a hedge against inflation, higher interest rates tend to reduce its appeal by increasing the attractiveness of interest-bearing assets.
Elsewhere, the Bank of England kept interest rates unchanged on Thursday, while the Bank of Japan is widely expected to raise rates to a 31-year high on Friday. Elsewhere, oil prices extended their decline as concerns over supply disruptions eased, while US President Trump said he hoped an end to the war with Iran was near.