Gold traded little changed, heading for a weekly drop, after a regional US Federal Reserve president said high inflation might call for the US central bank to tighten its monetary policy next year.
It could be appropriate for the Fed to begin increasing interest rates next year given a forecast for inflation above the US central bank’s 2 percent target, St Louis Fed President James Bullard said.
“I put us starting in late 2022,” Bullard said on Friday during a TV interview on CNBC, referring to interest-rate projections published on Wednesday by the US central bank after a two-day policy meeting.
Higher rates dampen demand for non-interest-bearing gold as an alternative asset.
The Bloomberg Dollar Spot Index advanced to a more than two-month high after Bullard’s comments, hurting demand for greenback-denominated bullion.
Gold posted its biggest weekly loss in 15 months, weighed down by concerns over tighter monetary policy.
Still, US Fed Chair Jerome Powell has cautioned that discussions about raising interest rates would be “highly premature.”
The central bank also signaled it was alive to threats of runaway price increases sparked by persistently higher-than-forecast inflation readings.
“Absent inflation expectations threatening to become unanchored — with the Fed unwilling or unable to calm things — gold will struggle to return to a bull market,” Macquarie Group Ltd strategists wrote in a note.
The bank expects gold to slide to US$1,600 an ounce by the end of the year.
Having broken through several key technical levels in just two days, prices would probably struggle to mount a quick recovery, Commerzbank AG analyst Carsten Fritsch said.
Spot gold was down 0.61 percent at US$1,762.63 per ounce, with prices down about 5.7 percent on the week, the most since March last year.
Gold for August delivery fell US$5.80 to $1,769 an ounce.
Other commodities:
‧ Silver for July delivery rose US$0.11 to US$25.97 an ounce and July copper fell US$0.02 to US$4.16 a pound.
Additional reporting by agencies
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary