(This July 15 story corrects first name of the Fed chairman in the first paragraph)
By Eileen Soreng
(Reuters) – Gold prices climbed to a one-month peak on Thursday after U.S. Federal Reserve Chair Jerome Powell soothed investor fears by reassuring that he was in no rush to tighten policy, lifting the metal’s appeal as an inflation hedge.
Spot gold was up 0.3% at $1,832.23 per ounce, as of 0752 GMT. Earlier in the session, bullion hit a peak of $1,833.65, its highest since June 16.
U.S. gold futures climbed 0.4% to $1,832.90.
Powell stuck to the view on Wednesday that the current price increases are transitory and the Fed expects to continue its bond-buying until there is “substantial further progress” on jobs, with interest rates pinned near zero likely until at least 2023.
His comments came on the heels of a robust U.S. producer prices data.
Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement.
Powell’s comments muted the dollar, while benchmark 10-year U.S. Treasuries yields fell, reducing the opportunity cost of holding bullion, which pays no return.
“We are not saying that there is no strong momentum in the economy, but there is suddenly a question can such growth rate sustain,” Hitesh Jain, lead analyst at Mumbai-based Yes Securities, said.
“As long as the balance sheet remains in an expansionary mode and interest rate being so low, gold still has the potential to move towards $2,000 by the end of this year,” Jain added.
On the technical front, spot gold may test a resistance at $1,833 per ounce, a break above could lead to a gain at $1,853, according to Reuters technical analyst Wang Tao.
Elsewhere, silver rose 0.4% to $26.34 per ounce.
Platinum hit a one-month peak of $1,142.35 per ounce and was last up 0.9% at $1,138.66 per ounce. Palladium was flat at $2,827.49.
(Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips and Vinay Dwivedi)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
This content was originally published here.
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