Gold: Fed risk keeps bullion vulnerable – ING
ING strategists Warren Patterson and Ewa Manthey say Gold has slipped as higher Oil prices stoke inflation concerns and reinforce expectations of a potential Federal Reserve rate hike, lifting Treasury yields and the US Dollar.
ING strategists Warren Patterson and Ewa Manthey explain why gold has faced challenges amid rising oil prices and inflation fears, which have led to heightened expectations of a potential Federal Reserve rate increase. These factors have driven up Treasury yields and the US dollar, putting pressure on the precious metal. While much of the hawkish risk from the Fed has already been priced in, gold could remain susceptible if policymakers indicate a prolonged period of higher rates.
Nonetheless, persistent geopolitical concerns and the economic fallout from surging energy prices continue to offer some underlying support for the commodity. Gold's performance in Asian trading hours remained subdued, hovering near its one-month low, as market participants positioned themselves ahead of the key Federal Open Market Committee meeting.
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