Asian Gold Market: Gold price falls below $1,740, beware of prolonged period of high interest rates next year
Investing.com – In Asian afternoon trading on Wednesday (23rd), gold prices fell below $1,740, and copper prices fell after rising more than 1% yesterday (22nd) rebounded as the pace of rate hikes narrowed.
A growing number of Fed officials have said in recent weeks that the US central bank could ease the pace of its rate hikes to 50 basis points in December, fueling growing bets that a peak has already been reached.
The reduction in interest rate rises is good for the metal market, which has been continuously hit by rising interest rates this year, and the improvement in economic conditions is also favorable to demand for industrial metals such as copper .
As of 13:29 Beijing time (00:29 am Eastern Time), Investing.com Commodity Markets showed it was down $4.22, or about 0.24%, to $1,735.86 an ounce; the price was down $3.55, or about 0.2%. , at $1,736.35 per ounce.
Given that rising interest rates have raised the opportunity cost of holding gold this year, the prospect of a rate rise has weakened to ease the pressure on gold in the short term. The market is now waiting.
But Kansas City Fed President Esther George warned on Tuesday that interest rates could remain high for longer to reduce inflation, a situation expected to weigh on metals markets next year.
Although gold has recovered most of its losses this year, it remains well below the two-year highs it hit earlier this year. At the same time, gold’s role as an inflation hedging instrument has essentially failed, and its safe haven status has also been replaced.
Among industrial metals, copper rose 1.20 percent on Tuesday, recovering further from hitting a 10-day low earlier. However, it was down 0.43% at $3.6055 at the time of writing, amid concerns over the continued rise in the number of infections in China.
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Compiler: Liu Chuan
