Gold has been lifted by market jitters as a result of the protests in China about continuing lockdown restrictions. With equities down, gold has climbed back to around $1,760 an ounce as investors seek out the precious metal as a haven.
Today’s boost underlines the support that remains for gold that has enabled it to sustain most of the gains made earlier in the month on the prospect of a pivot by the Federal Reserve. Later this week, we will get a test of the strength of that support when Fed Chair Jerome Powell speaks with gold investors hoping for a dovish tone to his comments after his fellow Fed officials have struck a more hawkish tone with talk of the need for interest rates needing to reach 5%.
Gold has found itself driven predominantly by the words and actions of the US central bank and the concern will be that this month’s largely sentiment-driven gains will face a swift turnaround if the Fed doesn’t prove as near to slowing down its aggressive rate hikes as initially expected.
So for now, gold is enjoying its buoyancy above $1,750 and is likely to continue to do so until the Fed’s December interest rate announcement. But for how long gold’s buoyancy will last, remains to be seen.
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