Gold is struggling to hold above $1,700 an ounce as the prospect of further aggressive rate hikes by the Federal Reserve, and other central banks across the world, allied to a US dollar trading at record levels have placed the precious metal under heavy pressure.
Tomorrow the European Central Bank is likely to raise its benchmark rate while later this month expectations are mounting that the Fed will implement another 75 basis point increase, something that is almost becoming commonplace now when just a few months ago it would have represented one of the largest moves in the US central bank’s history.
In an environment where interest rate moves are such significant market drivers, investors will be listening in to Andrew Bailey, the Governor of the Bank of England, when he appears before the Treasury Committee later today to glean more clarity on the bank’s likely hike trajectory while tomorrow features a speech by Fed Chair Jerome Powell.
It is hard to see how gold can make any gains given such a hawkish environment yet there clearly remains some underlying support for the metal that is at least enabling it to hold around the key threshold of $1,700.
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