Gold stages slight rebound on bargain hunting after Fed's hawkish tone

Thursday,   17-Jun-2021   08:56 AM (IST)

Gold prices rose on Thursday as investors took advantage of a sharp fall in the previous session to buy the metal after the U.S. Federal Reserve signalled it might raise interest rates sooner than expected. Spot gold was up 0.6% at $1,822.36 per ounce, as of 0235 GMT. U.S. gold futures were down 2% at $1,824.70 per ounce. The Fed on Wednesday began closing the door on its pandemic-driven monetary policy with 11 out of 18 Fed officials projecting at least two quarter-point interest rate increases for 2023. Gold is seen as a hedge against inflation, but an increase in rates from the Fed will dull bullion’s appeal as it translates into higher opportunity cost of holding it. Gold prices slipped more than 2.5% on Wednesday to its lowest since May 6 after hawkish comments from Fed officials lifted the dollar to a two-month high, while 10-year U.S. Treasury yields jumped. Elsewhere, silver gained 0.5% to $27.09 per ounce, palladium dropped 1% to $2,770.49, while platinum rose 0.5% to $1,127.49.