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Gold futures settled lower on Tuesday as the dollar firmed on bets the Federal Reserve will continue to hike rates longer than earlier thought.
Comments from a slew of Fed officials suggest the U.S. central bank will likely hike rates beyond 5% this year and hold them around those levels for longer duration in order to fight inflation.
The dollar index climbed to 103.49 in the European session, but pared some gains subsequently. It was last seen at 103.30, up nearly 0.3% from the previous close.
Gold futures for February ended lower by $1.30 at $1,876.50 an ounce.
Silver futures for March ended down $0.206 at $23.665 an ounce, while Copper futures for March settled at $4.0775 per pound, gaining $0.0510.
San Francisco Fed president Mary Daly said she expects interest rates to rise beyond 5% this year. Atlanta Fed president Raphael Bostic also said interest rates need to be raised above 5%.
Meanwhile, Fed Chair Powell emphasized the need for the central bank to be free of political influence while it tackles high inflation. Powell noted in a speech delivered to Sweden’s Riksbank today that stabilizing prices requires making tough decisions that can be unpopular politically.
Investors now look ahead to U.S. December inflation report due on Thursday for additional clues on the economic and interest the rate outlook.
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