Gold gains buoyed by expectations the US Fed has concluded its interest rate hikes

  • Kedia Advisory
  • Commodities News
Gold gains buoyed by expectations the US Fed has concluded its interest rate hikes
Credit: © Reuters.

Gold displayed a robust performance, settling up by 1.27% at 62722, fueled by market expectations that the U.S. Federal Reserve has concluded its interest rate hikes. This optimism is based on the belief that the Federal Reserve will require nearly four more years to cover a historic operating loss and resume sending profits to the U.S. Treasury. Research from the Federal Reserve Bank of St. Louis indicates that the losses are a consequence of the Fed's rate rise cycle, involving a significant increase in its interest rate target while simultaneously reducing the size of its balance sheet to tighten monetary policy and address elevated inflation levels.

In the physical gold market, top Asian hubs observed some selling activities as individuals sought to capitalize on relatively high prices. Lackluster demand during the wedding season in India led dealers to offer steeper discounts, reaching up to $6 an ounce over official domestic prices compared to the previous week's $3 discounts. Additionally, premiums in China declined to $20-$40 an ounce over global spot prices, which remained close to $2,000 an ounce. Hong Kong Census and Statistics Department data revealed a 23% month-on-month decline in China's net gold imports via Hong Kong in October.

Technically, the gold market is under fresh buying, with a 20.55% increase in open interest to settle at 16143. The current price increase of 785 rupees places gold with support at 62150, potentially testing 61580 if breached. On the upside, resistance is anticipated at 63045, with a breakthrough potentially leading to a test of 63370.

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