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Gold futures steadied Friday, looking for direction as they hovered near a nine-month high.
Price action
-
Gold for April delivery
GC00,
-1.68% GCJ23,
-1.68%
fell $1, or 0.1%, to $1,929.80 an ounce on Comex. -
March silver
SIH23,
-3.41%
shed 0.4% to $23.53 an ounce. -
April platinum
PLJ23,
-2.38%
fell 0.6% to $1,026 an ounce, while March palladium
PAH23,
-1.77%
gained 1.5% to $1,667.50 an ounce. -
March copper
HGH23,
+0.07%
was up 0.9% at $4.127 a pound.
Market drivers
Gold has rallied more than 5% so far in 2023, finding support as Treasury yields pull back and the U.S. dollar softens amid expectations the Federal Reserve is nearing the end of an aggressive cycle of interest rate hikes. Rising rates act as a weight on gold, with higher yields on bonds raising the opportunity cost of holding non-yielding assets like gold. A weaker dollar can provide support by making prices of commodities priced in the unit cheaper to users of other currencies.
The Federal Reserve on Wednesday approved a quarter-percentage-point increase in its policy interest rate. Federal Reserve Chair Jerome Powell said a “couple more hikes” are likely before the central bank takes a breather in its fight against inflation.
In the news conference that followed the announcement, Powell offered commentary that investors took as meaning fewer futures rate increases were ahead than many market participants had expected. Still, he did say that the Fed would have to “keep rates higher for longer” as it waits to see how fast inflation comes down.
The European Central Bank and Bank of England also delivered rate increases this week.
“The main driver on markets this week was not the moves themselves but the commentaries that supported them with traders extrapolating from the remarks of the central bankers that the end to the rate hike cycle is drawing near, even though all three banks were at pains to reiterate that more hikes are still needed,” said Rupert Rowling, market analyst at Kinesis Money, in a note.
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