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This article is more than 3 month old.

Gold ticks up but eyes worst week since March 2020 after hawkish Fed

Gold ticks up but eyes worst week since March 2020 after hawkish Fed
Gold rose on Friday but was headed for its worst week since March 2020 after the US Federal Reserve's hawkish message on monetary policy lifted the dollar higher and dented the safe-haven metal's appeal.
Spot gold was up 0.6 percent at $1,784.16 per ounce, as of 0258 GMT. However, prices have fallen nearly 5 percent so far this week.
US gold futures gained 0.5 percent to $1,783.20.
It was the Fed meeting and reversal in their policy outlook that triggered the drop in gold prices, said ED&F Man Capital Markets analyst Edward Meir, adding "the reaction in gold has been somewhat overdone."
"Despite the current high-growth, inflationary environment, the proposed Fed rate hikes are not expected to set in for at least another 18 months. So after a little bit more weakness here, gold prices will regroup and push higher."
The Fed on Wednesday signalled it would be considering whether to taper its asset purchase program meeting by meeting and brought forward projections for the first post-pandemic interest rate hikes into 2023.
Following hawkish comments from Fed officials, the dollar jumped to a two-month high and was on track for its best week in nearly nine months, while US benchmark 10-year yield rose.
Though gold is considered as a hedge against inflation, higher interest rates will reduce its appeal as they translate into a higher opportunity cost of holding the asset.
Indicative of sentiment, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.4 percent to 1,041.99 tonnes on Thursday.
The Bank of Japan is expected to maintain its massive stimulus and may extend a deadline for its pandemic-relief programme at the end of its two-day policy meeting on Friday.
Elsewhere, palladium gained 1 percent to $2,521.38 per ounce but was on track for its worst week since late March following a sharp drop on Thursday.
Silver rose 1.1 percent to $26.12 per ounce but was down 6 percent for the week. Platinum climbed 1 percent to $1,069.03.