Gold Defies Rate Hike Expectations with Surprise Weekly Gain
Gold futures have shown surprising resilience despite the U.S. Federal Reserve's interest rate hike for the first time since 2023 and a signal of further tightening by year-end.
Despite the increase in borrowing costs, gold prices edged higher on Friday and for the week, with front-month Comex gold gaining 0.6% to $4,385.90/oz and front-month Comex September silver climbing 1.6% to $66.556/oz.
Analysts attribute this resilience to investors focusing on larger structural forces supporting gold, including deteriorating government finances, persistent inflation, geopolitical uncertainty, and changing global reserve allocations.
According to Peter Cardillo of Spartan Capital, 'gold and silver are once again holding key support levels, a positive sign that the metals rally may be poised to gain traction despite the higher cost of money.'