Gold Price Touched $1838.42, En Route To Break 4-Week Losing Spree
Gold price turned higher on Friday and is now en route to finally breaking their 4-week losing spree. This comes after the Fed official's recent comments on how they will handle the monetary policy going forward.
Recently, The Fed president from Atlanta made it clear that a 25 bps is highly likely in March. And Christopher Waller (Fed Governor) believes rates will peak at 5.4% based on the current economic growth and inflation trends.
However, both Fed officials made it clear that more hawkish moves from the central banks will become a high probability if the economy overheats. Despite this negative comment, the gold traders only took note of the positive comments and pushed the yellow metal higher.
Gold Prices Increased By 0.2%
The price of spot gold was trading at $1838.42 after registering an increase of 0.2%. And the gold futures were trading at $1844.25 after rising by 0.2% as well.
Overall, both the spot gold and the gold futures are set to close the week with a 1.5% gain. If this happens, it would be the first positive week for the Gold since mid-January.
But let's not get ahead of ourselves, as the Gold still has several headwinds on the fundamental side. The first enemy of Gold is inflation, and the 2nd one is the strong labor market of the USA. Both of these economic indicators can call for more rate hikes in 2023!
Similarly, the recent release for the US service sector activity will also shed light on whether the Fed still has enough room for more rate hikes or not.
If the US interest rates are still higher than the forecast, then it would be bad news for the metal markets. Similarly, a stop to the rate hike policy or introduction of rate cuts will open the doors for Gold bulls!
If we look at other precious metals, it appears all of them are benefiting from the positive sentiment. The platinum futures are up by 7% for the week, and the silver futures are up by 1.2%.