Gold Prices Near $4,400 on Fed Interest-Rate Weighing
Gold prices are near $4,400 an ounce as traders weigh the Federal Reserve's interest-rate path. The economy's main engine is showing signs of cooling, with recent US data indicating declines in consumer sentiment and retail sales.
The declines in these indicators have eased fears of an imminent rate hike, which typically negatively impacts non-yielding bullion. However, the risk of monetary tightening remains as oil prices climbed after the US threatened to impose economic measures on Iran.
Federal Reserve Bank of Chicago President Austan Goolsbee expressed his desire for more inflation cooling before considering the 2% target to be met. He noted that a recent decrease in inflation is encouraging, but wants it to continue in coming months.
Gold's recovery above $4,000 an ounce has been driven by renewed investor appetite and central bank purchases, particularly from China. Spot gold traded 0.6% higher at $4,374.24 an ounce at 4:33 p.m. in New York.