Following Powell's hawkish comments, gold prices decline to a 1-week low

8 Mar 2023 , 08:27 AM

As U.S. Federal Reserve Chair Jerome Powell suggested that interest rates may need to rise more than initially anticipated in order to reduce inflationary pressures, gold prices fell to a one-week low on Wednesday.

Spot gold was down 0.1% at $1,811.83 per ounce after dropping more than 1% on Tuesday. Futures for U.S. gold decreased 0.2% to $1,816.30.

While the dollar index rose to a three-month high, gold became more expensive for buyers using foreign currencies.

According to recent good data, the Fed will likely need to hike interest rates more than anticipated. Powell told U.S. legislators on Tuesday that the Fed is prepared to make larger moves if the ‘totality’ of incoming evidence indicates that tougher measures are required to contain inflation.

After Powell’s comments, traders of futures linked to the Fed’s policy rate have priced in a rate increase of 50 basis points at the institution’s policy meeting on March 21–22.

The U.S. jobs report for February, which is scheduled on Friday, is anticipated by investors.

The head of Australia’s central bank said on Wednesday that the country was getting closer to stopping its rapid cycle of rate increases since the country’s monetary policy was now becoming more restrained. He also suggested that a pause may occur as early as April.

At $20.01 per ounce, spot silver was down 0.2%, platinum was up 0.4%, and palladium was down 0.2% at $1,384.59.

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