The attractiveness of bullion among foreign investors was helped by the fall in the dollar indexMeanwhile he yen skyrocketed after the Bank of Japan decided to review its yield curve control policy.
According to Han Tan, Exinity’s chief markets analyst, spot gold is getting another chance to shine on the back of the US dollar’s pullback, adding in dialogue with Reuters that “the next leg down in the dollar should drive spot gold to a new cycle high above $1,824.50“.
Fed Chairman, Jerome Powellsaid last week that the central bank will offer more interest rate hikes next year, even as the economy heads toward a possible recession. Other major central banks have also underlined a similar stance.
The bullion has lost more than $260 since its March high, as global central banks intensified their efforts to combat rising inflation.
Although gold is considered a hedge against inflation, higher rates increase the opportunity cost of holding the assetwhich does not pay interest.
While, China faced a surge in COVID-19 cases and the World Bank cut its growth outlook for this year and the next for the main consumer of bullion.
Between other precious metalsthe silver Spot rose 4.5% to $23.98 an ounce, posting its biggest intraday gain since early November. The platinum earned 3.2% to u$s1,011.17 and the palladium added 2.9% to u$s1,717.38.
Source: Ambito
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