Gold ends lower Monday as inflation, Fed interest-rate outlook remain in focus

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Gold futures were down marginally on Monday, as Treasury yields rose and the dollar helped ease appetite for the precious commodity, which was held back by uncertainties about the spread of policies from O’Micron and the Federal Reserve. has gone.

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Stephen Flood, director of bullion services at Goldcore, said “the move to hedge against risk and the US dollar bid up,” said gold’s move on Friday was “natured” on Monday.

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“All eyes are on Friday’s US CPI release to get an idea of ​​how inflation is going, expect fireworks if a fall,” he told Businesshala. Investors are also eagerly awaiting the Fed’s December 14-15 meeting “to see how interest rate policy will adjust to inflation.”

“The Fed is caught between sinking the markets with higher rates, to ease inflationary pressures, or the real risk of scaring the stock markets,” he said. “If there is a signal to increase rates, gold could suffer in the short term.” Higher rates increase the opportunity cost of holding the precious metal, making gold less attractive to investors.

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Most active February gold contract GCG22,
-0.19%

GC00,
-0.19%
After a weekly decline of 0.1% for the most active contract, it closed $4.40, or about 0.3%, down at $1,779.50 an ounce, according to Dow Jones market data. Gold also rose around 1.2% on Friday.

March Silver SIH22,
-0.81%,
Meanwhile, after a weekly loss of 2.7% on Friday, it fell 22 cents, or 1%, to close at $22.263 an ounce.

Gold ended last week as a weaker-than-expected jobs report was seen as likely to derail the Fed’s plan to reduce monthly, pro-market purchases of Treasury and mortgage-backed securities. , with the report the flight was headed to the alleged property. as safe.

However, prospects of higher rates have had a significant impact on gold prices.

Jeb Handwerger, editor of the newspaper service Gold Stock Trades, said Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell have indicated that the central bank may begin lowering and raising interest rates, as gold has been in consolidation for several months.

“Powell said there is no inflation, then accepted temporary inflation but now he has reluctantly accepted that inflation is full on,” Handwerger said. “The question now is whether they can lower and raise rates to control inflation without crashing the all-time bubble and preventing gold from going higher. So far they are managing. ,

,“The question now is whether they can lower rates to control inflation and all without crashing the all-time bubble and preventing gold from going higher.”,


– Jeb Craftsman, Gold Stock Trades

“History teaches us that we should be cautious because once inflation hits, it is difficult to reverse the effect so quickly and easily,” he said. “Think of gold as a barometer.”

In Monday’s deal, the 10-year Treasury note TMUBMUSD10Y,
1.435%
The ICE US dollar index was up 1.437%, up 1.342%, estimated by DXY, while the dollar was up 0.2%,
+0.19%,

Meanwhile, investors await the consumer-price index data due on Friday. “If we see inflation expectations not stabilizing, but continuing to decline, gold will fall sympathetically,” analysts at Sevens Report Research wrote in Monday’s newsletter. “Conversely, a resurgence in inflation will support gold, but the September low of $1,725 ​​remains a line-in-the-sand for the bulls.”

Traders see next US CPI reading near 7% as volatile markets try to shake off Omicron and the Federal Reserve’s hawkish pivot

Other metals traded on COMEX ended higher on Monday with March copper HGH 22,
+1.73%
It rose nearly 1.7% to $4.338 per pound.

Jan Platinum PLF22,
+0.99%
March Palladium PAH22, while the price rose 1.1% to $936.40 an ounce.
+1.93%
It closed at $1,845.60 an ounce, up 1.8%.

An overall upward trend for platinum, palladium commodities, poised for heavy losses of 2021

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