Gold Holds Amid Dollar and Fed Policy Uncertainty
Gold prices held steady after suffering their biggest drop in more than a week, amid a strengthening U.S. dollar that reached its highest level since May. Spot gold held steady around $3,937 an ounce after falling nearly 2% in the previous session. The U.S. dollar index rose for a fifth straight day, its best performance since July, as traders began to doubt the likelihood of further interest rate cuts from the Federal Reserve next month. A stronger dollar makes gold and other commodities more expensive for buyers outside the U.S.
This week, several Fed officials expressed doubts about further interest rate cuts in December, citing risks from inflation and a weaker labor market. Investors await additional insights from other Fed officials, including St. Louis Fed President Alberto Musalem and Cleveland Fed Chair Beth Hammack, who are scheduled to comment in the coming days.
Despite the decline, gold prices are still up about 50% this year, having reached a record high last month before experiencing a slight correction. This price decline has also been accompanied by a withdrawal of funds from gold-backed exchange-traded funds (ETFs), although the pace of withdrawals has slowed recently.
According to Bart Melek, a strategist at TD Securities, it is not surprising that gold prices will trade in the range of $3,800 to $4,050 per ounce for the foreseeable future. Despite uncertainty regarding the prospect of a Fed interest rate cut and concerns about retail buying in China, the factors supporting gold prices this year remain. Official sector purchases and strong private investor demand are expected to push gold prices higher again after a consolidation phase. (Asd)
Source: Newsmaker.id
