June 24, 2022

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Gold flat as firmer dollar counters support from Ukraine crisis

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Gold prices remained trapped in a tight

range on Friday as the dollar firmed on prospects of aggressive

interest rate hikes by the U.S. Federal Reserve, partially

offsetting safe-haven demand fueled by the lingering

Russia-Ukraine conflict.

Spot gold was subdued at $1,929.48 per ounce by 0318

GMT. U.S. gold futures were down 0.3% at $1,931.90.

“Gold has held up relatively well this week given the move

higher by both U.S. yields and the U.S. dollar, we may be seeing

some underlying haven and inflation hedging buying supporting

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the downside,” said OANDA senior analyst Jeffrey Halley.

The U.S. dollar climbed to a near two-year high against a

basket of currencies and set for its best week in a month,

backed by hawkish remarks from several Federal Reserve policy

makers who are calling for a faster pace of interest rate

increases to curb rapid inflation.

A stronger U.S. dollar makes gold less attractive for other

currency holders.

The benchmark U.S. 10-year Treasury yield touched a

three-year high in the previous session, increasing the

opportunity cost of holding non-yielding bullion.

Gold, however, is being supported by the Ukraine

uncertainty, rapid inflation, and the still persistent COVID-19

pandemic but the Fed’s aggressive stance to combat inflation,

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recovering bond yields, stronger dollar and easing of pandemic

restrictions on higher vaccination rates will put a lid on gold

prices, Fitch Solutions said in a note dated April 7.

Russia gave the most somber assessment so…

Reuters

2022-04-07 23:38:01

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