Gold Steady Above Support of $1200

Gold steadied near a seven-week low on Tuesday as investors looked to Federal Reserve Chair Janet Yellen’s Senate testimony for signs of when the U.S. central bank could raise interest rates.  Expectations the Fed will hike rates this year amid signals of a strengthening U.S. economy have curbed gold’s safe-haven appeal.

But investors are keen to see if Yellen will echo the minutes of the Fed’s January meeting, when policymakers expressed the view that raising interest rates too soon may pour cold water on the U.S. recovery.  Spot gold was little changed at $1,201.10 an ounce by 0247 GMT. The metal on Monday hit its weakest since Jan. 5 at $1,191.01.

Gold has fallen more than 6 percent this month, nearly erasing January’s 8.4-percent gain, which was its biggest in three years.  “With a healthy U.S. economy, that gives the impetus for the Fed to start normalising interest rates and this is a very bearish signal for gold,” said OCBC Bank analyst Barnabas Gan, who sees the metal at $1,000 by year-end.

Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.