Gold is little changed so far on Friday as traders digest the week’s events and look ahead to next week’s interest rate decision by the Federal Reserve.
Yesterday saw the European Central Bank finally join the hiking party by raising its benchmark rate by 50 basis points, which was double the anticipated move. This saw the euro strengthen against the dollar and provided slight relief for all those commodities priced in dollars, including gold.
Live Gold Price – $/oz
The fact the ECB was forced into a relatively large move highlights the size of the task central banks are facing as they try and bring ever-escalating inflation under control. Next week is likely to see the Federal Reserve implement its second successive hike of 75 basis points but with this now long-trailed, it would take a move that surpasses expectations to materially move markets.
Having endured a difficult July in which its price has plunged from above $1,800 an ounce to now be languishing around $1,720 an ounce, gold looks to have settled into this new level. On the upside, it is hard to see gold making sizeable gains given the backdrop of ever-rising interest rates globally, while support remains for gold as a haven asset given the market jitters about a looming recession as well as the ongoing war in Ukraine.
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