Inflation Concerns Dominate Markets as Gold Continues to Trade in Recent Range

A new week starts but it’s a familiar headline dominating proceedings with equities falling on concerns about the impact that inflation is having on economic growth prospects with both the Federal Reserve and Bank of England set to announce further interest rate increases this week.

Gold has found itself pulled by two contrasting factors with an increased appeal for safe-haven assets offset by the prospect of a series of rate hikes by central banks across the world. As a result, the initial gain that saw gold touch $1,870 an ounce was quickly reversed with the precious metal having found its natural range for the time being between $1,840-$1,860 an ounce. 

Live Gold Price – $/oz

On Wednesday the Fed is set to raise its benchmark rate by 50 basis points for a second consecutive month while on Thursday the Bank of England is expected to nudge its rate up to 1.25%. While these rates still remain low historically, after such a sustained period of low-interest rates, the reaction on markets has shown how used everyone had become to being able to borrow ultra-cheaply.

Gold had initially suffered in this switch to hawkish policies but with this week’s interest rate moves priced in, it would take a surprise move to materially move the price of gold from its current range.

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 greenwashing while investing sustainably.

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