Title: Gold Up over a Pullback in the U.S. Dollar
Jul 18, 2022 01:05AM ET
Gold was up on Monday morning in Asia over a pullback in the U.S. dollar as investors’ bets of a 100-basis-point interest rate hike from the U.S. Federal Reserve this month receded.
Gold futures were up 0.52% to $1,671.75 by 09:35 PM ET (0135 GMT). The dollar, which normally moves inversely to gold, edged down on Monday morning as the Fed signaled that they would stick to a 75-bp rate increase during their meeting on July 26-27 to bring down inflation.
The market walked back the idea of a 100-bp rate hike after Friday’s University of Michigan inflation component came in softer,” SPI Asset Management managing partner Stephen Innes told Reuters.
U.S. Michigan 5-Year inflation expectations released on Friday fell to 2.8% for July from 3.1% in June.
Central bank hawkishness has been already priced in, and with gold holding on to $1,700-per-ounce level last week, we may see shorts get squeezed a bit as hawks might be disappointed with the Fed only hiking rates by 75 bps next week.
Fed officials signaled that they would stick to a 75-bp rate increase during their meeting on July 26-27 to bring down inflation.
The European Central Bank is expected to raise rates by 25 bps at its policy meeting later this week.
In other precious metals, silver was up 0.89%. Platinum gained 1.35%, while palladium was up 2.61%.