After down 1.1% on Thursday, bullion dropped below $4,200 an ounce in early trading and is expected to slide moderately this week. Gold, which doesn’t pay interest, was impacted by the hawkish tone of new Fed Chairman Kevin Warsh on Wednesday, which increased predictions for a tightening of monetary policy this year.
As per a Bloomberg report, the fears of protracted energy shortages were allayed when the US announced an end to the blockade, and commercial ships started to resume passage to the Strait of Hormuz.
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A report from Reuters said that nine of the US central bank’s 19 policymakers now believe they will need to raise the policy rate this year, according to projections published on Wednesday after the Fed announced its decision to leave the policy rate in its current 3.50%-3.75% range in Kevin Warsh’s debut policy meeting as chairman.
Reuters also said that Goldman Sachs no longer anticipates a Fed rate cut this year; thus, it now projects that gold prices will increase to $4,900 per ounce by December, down from its previous estimate of $5,400.
Dubai’s commodities exchange said that the company will introduce a same-day settlement gold futures contract on Monday in an effort to increase liquidity in the emirate’s metal market by leveraging safe-haven demand and quicker trading infrastructure.
In the early hours of trade, gold had dropped 0.5% to $4,190.21 per ounce. Silver fell 0.5% to $65.34. Palladium and platinum were somewhat lower. This comes after increasing by 0.8% over the previous four sessions.
(With inputs from Reuters and Bloomberg)
(Edited by : Juviraj Anchil)
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