Gold Steadies Despite Rate Hike Headwinds, Set For Flat Week

By Ambar Warrick

Investing.com-- Gold prices steadied on Friday, and were set to end the week largely unchanged as selling pressure from a hawkish Federal Reserve appeared to have eased.

Bullion prices showed surprising resilience this week after the Fed hiked rates and struck a more hawkish tone than many were expecting, with U.S. interest rates now set to end the year well above 4%,

But prices of the yellow metal were still trading well below $1,700 - a key support level they lost this week. This also spurred some bargain hunting for gold.

Spot gold was largely unchanged around $1,672.37 an ounce, while gold futures held around $1,680 an ounce at 19:40 ET (23:40 GMT). Resilience in prices also came as the dollar retreated slightly from a fresh 20-year peak hit on Thursday.

The near-term outlook for gold is still constrained by the prospect of rising U.S. interest rates, which boosted the dollar and dragged bullion prices off record highs this year.

But expectations of more economic ructions from the Fed’s hawkish moves have raised expectations that the yellow metal may eventually regain its safe haven status. Traders are also pricing in the possibility that the Fed will begin cutting rates in late 2023 to prevent broader economic shocks from high rates.

“The hawkish Fed projections are a rather grim outlook for the economy and that could eventually trigger a resumption of a safe-haven role for gold. ​This inflation fight is going to get ugly for the economy, but right now it seems the Fed will be done hiking in February,” analysts at Oanda wrote in a note this week. They also indicated that gold may have found a bottom.

Among industrial metals, copper futures rose 0.2% to $3.4690 a pound on Friday.

Prices of the red metal were set to end the week 1.4% lower, down for a second consecutive week as traders feared that rising interest rates across the globe would weigh on industrial activity.

Apart from the Fed, the Bank of England also hiked rates this week to combat rising inflation, as did central banks in Europe and Asia.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.6% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network
  • London Office
    One Financial Markets 

    1 Finsbury Market
    London
    EC2A 2BN
    United Kingdom


    T:  + 44 ( 0 ) 203 857 2000
    E:  info@ofmarkets.com
  • Dubai Office
    One Financial Markets 
    OT19-39 Central Park Tower
    Dubai International Finance Centre
    Dubai
    United Arab Emirates
     
    T: + 00 971 44 22 888
    E:  info@ofmarkets.com
     

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

www.onefinancialmarkets.com is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: