Investor focus is on inflation data that could influence the Fed’s decision to taper its stimulus at a faster pace
Bengaluru — Gold prices rose on Wednesday as the US treasury yields and the dollar eased, with investor focus shifting to key inflation data due this week that could influence the Federal Reserve’s decision to taper its stimulus at a faster pace.Boosting bullion’s appeal, benchmark 10-year and 30-year US treasury yields retreated from a one-week high hit on Tuesday while the dollar index weakened 0.2%.
Bullion prices also got a lift after US President Joe Biden threatened to impose “strong economic and other measures” on Russia if it invades Ukraine.“We’ve got this geopolitical issue bubbling in the background and that’s driving a small bid in gold. But there’s not a lot of fervour in the move and any breakout of the $1,770-$1,810 range ultimately hinges on the Fed’s decision next week,” Stephen Innes, managing partner at SPI Asset Management.
“Negative real interest rates could keep gold near $1,800 in the first half of 2022, but more downward pressure is likely to build after the Fed starts hiking interest rates in mid-2022,” ANZ analysts said a note, adding that it expects gold to touch $1,600/oz by this year-end.
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