NEW YORK: Gold prices bounced back in volatile trading on Friday, as focus turned to economic risks following an initial retreat in bullion after elevated US inflation readings bolstered bets for aggressive interest rate hikes. Spot gold rose 0.8% to $1,861.39 per ounce by 11:27 a.m. EDT (1527 GMT). US gold futures advanced 0.7% to $1,864.60.
US consumer prices accelerated in May, suggesting the Federal Reserve could continue with its 50 basis points rate hikes through September, sending gold to its lowest since May 19 at $1,824.63. But the safe-haven asset soon erased those losses as investors assessed the economic repercussions, with bullion getting a further fillip after the University of Michigan’s survey showed US consumer sentiment plunged to a record low in early June amid soaring gasoline prices. High interest rates usually dim bullion’s appeal since they translate to an increased opportunity cost of holding the asset, which pays no interest. Gold’s fate next week may hinge on the Fed meeting, Wong added.
Comments
Comments are closed for this article.