Gold reclaims its footing as Oil retreat blunts Fed shock
Gold (XAU/USD) price extends its gains on Friday, edging up 0.89% as Oil prices eased despite renewed concerns of supply shortages and despite a week that featured a rate hike by the Federal Reserve (Fed), which pushed the yellow metal to a nearly two-month low of $4,235.
Gold prices have rebounded on Friday, increasing by 0.89% as oil prices softened, despite the Federal Reserve raising interest rates for the first time in three years. The yellow metal fell to a nearly two-month low of $4,235 during the week, driven by concerns over the Middle East conflict and the Houthis' attacks on oil pipelines.
Despite this, gold remains a safe-haven asset, sought by investors in turbulent times, and is often used as a hedge against inflation and currency depreciation. Currently, gold is trading at $4,379, and could potentially break key resistance levels of $4,400, $4,450, and $4,500 if it continues its upward trend. The US Dollar Index remains relatively stable, while the US 10-year Treasury yield increased by nearly six basis points to 4.996% following the Fed's rate hike.
Central banks hold the largest reserves of gold, diversifying their currency support strategy. Geopolitical tensions and interest rate fluctuations continue to influence gold prices, which are primarily priced in US dollars.
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