Gold slipped back from its highest level in three months following cautionary comments from Federal Reserve Governor Christopher Waller that policymakers had “a ways to go” before ending interest-rate hikes.
The Governor’s comments gave the US Dollar a boost with gold falling slightly due to the precious metal’s typically inverse correlation with the greenback. The remarks also served as a reminder that gold’s huge gains last week were driven by sentiment that the Fed will be less aggressive with its future upcoming interest rate decisions rather than on any firm fact.
The pace of last week’s gains, in which gold climbed more than $100 an ounce, leave gold open to some profit-taking this week as investors reassess where the true value of the precious metal lies. While the latest inflation figure out of the US was undoubtedly encouraging, rising consumer prices remain an issue that the Fed looks determined to get back under control through interest rate rises.
Taking all these factors into consideration, gold’s current price looks dangerously high and it would only take a slight shift in sentiment on where the Fed will go with its December rate move for the price to come quickly crashing back to $1,700 an ounce.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
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