Gold News

Gold and Silver Prices Flat with Stocks as US Fed Member Urges Caution on Rate Hikes

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.
MSCI World Index. Source:
"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.

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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