News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Gold holds ground despite Fed's rate rise signals

01/17/2022 | 06:18am EDT

(Recasts, adds analyst comment, updates prices)

* Traders await U.S. Federal Reserve policy meeting

* Specs cut net long positions in gold- CFTC

* U.S. markets closed for Martin Luther King Day

Jan 17 (Reuters) - Gold prices held their ground on Monday, with expectations of monetary policy tightening in the United States capping gains.

With U.S. markets closed for a public holiday, spot gold rose 0.2% to $1,820.50 per ounce by 1412 GMT, while U.S. gold futures had inched 0.2% higher to $1,820.50.

"A tightening money policy could have negative impacts on gold, but despite that gold has been holding up very well. I think it's mainly because the overall Fed balance sheet is still at elevated levels," Xiao Fu, head of commodities markets strategy at Bank of China International, said.

While considered an inflationary hedge, gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion.

U.S. 10-year Treasury yields hit two-year highs last week on rate hike expectations.

The focus is now on the U.S. Federal Reserve's Jan. 25-26 meeting after policymakers signalled that they would start raising interest rates in March to tame inflation.

"Market participants are likely to refrain from buying gold ahead of the U.S. Fed's first rate hike," Commerzbank analysts wrote in a note.

"They may be hoping that the Fed's meeting next week will give them further and/or clearer signals that the Fed will be commencing its rate hike cycle in March."

Reflecting wider sentiment, speculators cut net long COMEX gold position in the week to Jan. 11, data on Friday showed.

Elsewhere, spot silver was up 0.2% to $23.00 an ounce, platinum rose 0.3% to $973.50, and palladium was up 0.6% to $1,889.68. (Reporting by Seher Dareen and Swati Verma in Bengaluru; Editing by Aditya Soni and Alexander Smith)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.11% 0.7091 Delayed Quote.-2.40%
BANK OF CHINA LIMITED 0.33% 3.07 Delayed Quote.8.90%
BRITISH POUND / US DOLLAR (GBP/USD) 0.36% 1.25859 Delayed Quote.-7.11%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.09% 0.78044 Delayed Quote.-1.14%
COMMERZBANK AG 1.49% 7.774 Delayed Quote.14.52%
EURO / US DOLLAR (EUR/USD) -0.37% 1.0693 Delayed Quote.-6.03%
GOLD -0.72% 1853.6 Delayed Quote.1.35%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.06% 0.0129 Delayed Quote.-3.95%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.53% 0.6479 Delayed Quote.-5.73%
ON SEMICONDUCTOR CORPORATION 3.19% 56.24 Delayed Quote.-19.76%
SILVER -0.59% 21.991 Delayed Quote.-6.60%
Latest news "Economy & Forex"
05:56pBlackRock, other major McDonald's shareholders side with company in fight with Icahn
RE
05:48pUKRAINE AND RUSSIA : What you need to know right now
RE
05:48pAfter Texas massacre, U.S. senators discuss options against 'very slim' odds
RE
05:46pRussia pounds Ukraine's east as town buries dead in mass grave
RE
05:45pTech Up on Risk Appetite, but Nvidia Falls After Hours -- Tech Roundup
DJ
05:44p'NO IDEA THIS WAS GOODBYE' : Texas families grieve on social media
RE
05:43pDepp refutes Heard's claims as 'ludicrous, painful'
RE
05:39pThe WSJ Dollar Index Rises 0.26% to 94.76 -- Data Talk
DJ
05:39pSterling Gains 0.34% to $1.2576 -- Data Talk
DJ
05:39pEuro Lost 0.51% to $1.0681 -- Data Talk
DJ
Latest news "Economy & Forex"