Gold price falls after US Fed Chief Jerome Powell reiterates hawkish stance

Spot gold was little changed at $1,906.45 per ounce, lingering near its lowest since mid-March. US gold futures fell 0.4% to $1,914.70. Spot silver price rose 0.3% to $22.776 per ounce.

On Wednesday, Powell said that more rate rises likely lie ahead for the central bank, and did not rule out a boost in the cost of borrowing at a policy meeting scheduled for the end of July, Reuters reported.

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“Gold prices were dragged down by a hawkish tone by Fed chair Jerome Powell and the expectations of a 25 basis points interest rate hike in July. The US dollar index was firm, keeping yellow metal under pressure,” said Ajay Kedia, Director, Kedia Advisory.’

While gold is considered a hedge against inflation, rising interest rates diminishes appeal for non-yielding bullion.

Kedia believes that gold prices are making a base at levels around $1,880-1,900, while the outlook remains ‘buy on dips’ amid geopolitical concerns over Russia.

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“For next week, support for gold is seen at $1,882 level and resistance is placed at $1,934 level,” Kedia said.

Meanwhile, domestic Indian markets are shut for holiday. 

Gold price has fallen about 3% so far in June and is likely to be headed towards ending the quarter in negative territory for the first time since September 2022, amid falling hopes of end to the rate hike cycle.

Disclaimer: The views and recommendations given in this article are those of individual analysts and brokerage firms. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

Updated: 29 Jun 2023, 03:12 PM IST