Gold Falls On Us Rate Hike Expectations

Gold Falls On Us Rate Hike Expectations

CHICAGO, April 22 (Bernama-Xinhua) — Gold futures on the COMEX division of the New York Mercantile Exchange fell on Friday as market expects that the FederalReserve will raise the interest rate again at its May meeting, reported Xinhua.

The most active gold contract for June delivery fell US$28.60, or 1.42 per cent, to close at US$1,990.50 per ounce. Cleveland Federal Reserve President Loretta Mester joined other Fed presidents on Thursday in signaling support for more rate hikes to curb infl ation.

“I anticipate that monetary policy will need to move somewhat further into restrictive territory this year, with the fed funds rate moving above 5 per cent and the realfed funds rate staying in positive territory for some time,” Mester said in a speech in Akron, Ohio.

Market analysts hold that chances of another 25 basis point hike at the Fed’s May meeting are higher than 80 per cent.

The S&P Global US service sector purchasing managers’ index (PMI) rose to 53.7 in April from 52.6 in the prior month, a 12-month high; the fl ash US manufacturingsector PMI rose to 50.4 in April from 49.2 in March. Economists had expected manufacturing to sink to 49 in April and for services to weaken to a 51.5 reading.

Silver for May delivery fell 31.50 cents, or 1.24 per cent, to close at US$25.058 per ounce. Platinum for July delivery rose US$31.10, or 2.81 per cent, to close atUS$1,138.70 per ounce.

— BERNAMA-XINHUA

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