(MENAFN- Baystreet.ca) Slowing Pace of Rate Hikes Favors Gold Prices
Prices for bullion bounced above the key $1,750 U.S. an ounce level on Thursday, consolidating gains after minutes of the U.S. Federal Reserve's latest meeting signaled slower interest rate hikes.
Spot gold rose 0.4% to $1,755.73 U.S. per ounce U.S. gold futures advanced 0.6% to $1,755.90.
Lower rates tend to lift the appeal for bullion in comparison with other interest-bearing assets. High interest rates have kept a leash on gold's traditional status as a hedge against high inflation and other uncertainties this year as they translate into higher opportunity cost to hold the non-yielding asset.
The minutes of the Fed's Nov. 1-2 meeting showed that a“substantial majority” of Fed policymakers agreed it would“likely soon be appropriate” to slow the pace of interest rate hikes.
Market activity was likely to be relatively muted by the U.S. Thanksgiving holiday.
Physical gold demand in Asia, meanwhile, stayed soft this week, with premiums in top hub China easing further as fresh COVID-19 restrictions dimmed activity, while higher domestic prices put off most buyers in India.
Spot silver rose 0.5% to $21.62 U.S. per ounce, platinum added 0.3% to $999.38 U.S., while palladium gained 0.7% to $1,894.75 U.S.
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