Karnataka News Network
Buisness

Powell comments that renewed banking jitters provide a lifeline for gold

On increased concerns over the health of the banking sector, gold rose 1% on Friday, recovering some of this week's losses. However, traders reduced their bets on another interest rate rise in response to comments made by the chairman of the U.S. Federal Reserve.
By 12:30 p.m. ET (1830 GMT), spot gold was up 1.2% to $1,981.79 per ounce. American gold futures ended the day at $1,981.60, up 1.1%.
According to Tai Wong, an independent metals trader based in New York, “Gold is up more on Yellen than a cautious Powell which still suggests that June will be a “skip” meeting unless data over the next few weeks is especially troubling.”
After CNN reported that U.S. Treasury Secretary Janet Yellen had advised bank CEOs that more mergers could be required in light of a string of bank failures, shares of regional lenders in the United States dropped.
Bank worries before to a weekend are the main factor that causes the market to instinctively go for an airsick bag, according to Tai Wong.
The question of whether U.S. interest rates need to go further remains unanswered, according to Fed Chair Jerome Powell, as central bank policymakers weigh the uncertainty over the effects of previous rate rises on borrowing costs.
The odds that the Fed will keep interest rates unchanged until July are at 82%.
Following a string of solid economic statistics, gold was headed for its lowest week since February, down nearly 1.5% so far.
According to Edward Moya, senior market analyst at OANDA, “this is the week that gold really got crushed because there's been a steady flow of that debt ceiling optimism and, in addition to that, some hawkish pushback from the Fed.”
Republicans in the US House and President Joe Biden's Democratic administration have suspended negotiations to raise the debt limit.
Palladium increased 3.8% to $1,508.57, platinum gained 1.4% to $1,064.09, and silver increased 1.7% to $23.90 per ounce.

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