Gold and Silver Prices Flat with Stocks as US Fed Member Urges Caution on Rate Hikes
Wednesday, 5/25/2022 14:24
GOLD and SILVER prices struggled Wednesday in London as energy prices rose but longer-term interest rates fell ahead of the release of meeting notes from this month's US Fed decision to make the sharpest hike to overnight borrowing costs in 2 decades.
Gold priced in the Dollar traded 0.8% below yesterday's 2-week high of $1870 per ounce, while silver bullion doubled that drop to 1.5% at $21.85.
Global stock markets also flatlined after falling Tuesday for the 60th session out of 102 so far in 2022 on the MSCI World Index.
That daily loss rate of 59% exactly reverses 2021's full-year strike rate for daily gains.
"Inflation is too high and must be addressed," writes Raphael Bostic, President of the Atlanta Federal Reserve, echoing comments from Fed chief Jerome Powell and other policymakers
including US President Joe Biden.
"[But] I plan to proceed with intention and without recklessness," says Bostic – a non-voting member of the FOMC this year – warning that too rapid a rise in rates risks "triggering significant economic dislocation.
"Even firetrucks with sirens blaring slow down at intersections lest they cause further preventable trouble."
With
inflation on the Consumer Price Index running at 4-decade highs above 8% per year, growth in
US durable goods orders today showed a marked slowdown for April, expanding by only 0.3% when defense products are excluded against consensus forecasts of 1.2%.
The Census Bureau also revised down March's monthly pace of expansion.
Government bond prices rose meantime, pushing longer-term borrowing costs down to 6-week lows of 2.73% per annum on 10-year US Treasury debt.
Eurozone bond yields also eased back after hitting multi-year highs of their own earlier this month, with Germany's 10-year Bund offering new buyers 0.92% per annum.
That's more than one full percentage point higher from the start of March, when Russia's invasion of Ukraine saw
gold prices hit fresh all-time records against the single currency at €1900 per ounce.
Overnight rates at the European Central Bank are set to rise for minus 0.5% at July's meeting, claims a Bloomberg story, with 3 members of the 19-nation policy team openly calling a half-point hike to zero "appropriate".
"It would keep people on their toes and signal to markets that we've understood the need to act,"
the news-wire quotes Robert Holzmann of the Austrian National Bank.
"[Any]thing else risks being seen as soft."
Gold priced in Euros today traded at €1736 per ounce, down 0.5% for the week so far, while silver bullion cost €20.50, some 3.8% above mid-May's 3-month lows.
The
UK gold price in Pounds per ounce meantime slipped 0.7% from yesterday's 2-week high above £1490, while silver – which saw
all sectors of demand increase last year, from industrial to jewelry to investment – also held flat for the week to date at £17.48.
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