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San Francisco Fed President Mary Daly says U.S. rate hikes could have more real-world impact than her short-term rate target suggests
Photo: Reuters file
Gold prices edged higher on Tuesday morning after retreating 1% in the previous session as the dollar weakened, with focus turning to the minutes of the Federal Reserve’s most recent meeting for clues on future rate hikes.
Spot gold was up 0.37% at $1,744.66 an ounce by 9:10 am UAE time.
In the UAE, 24K opened at Dh211.5 per gram on Tuesday morning, compared to last night’s close of Dh211.25 per gram. Among other variants of the precious metal, 22K was traded at Dh198.5 per gram, 21K at Dh189.5 and 18K at Dh162.5.
Gold fell for a fourth straight session on Monday as investors preferred the safety of the U.S. dollar as a hedge as new Covid-19 restrictions in China fueled concerns about the global economic outlook.
Additionally, San Francisco Fed President Mary Daly said on Monday that the real-world impact of the Fed’s rate hikes could be larger than its short-term interest rate target would suggest.
Gold will only be a safe-haven trade if the dollar is in defensive mode, said Edward Moya, senior market analyst at Oanda.
“Gold needs an improvement in the Covid situation in China to become attractive to investors again. If the dollar gains too much, gold could easily fall towards the $1,700 level,” he said.
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