Gold jumps 1.50% to fresh seven-month highs
Gold price is trading close to the highest level in seven months above $1,860, catching a fresh bid in the European session. The US Dollar bears refuse to give up, tracking the sell-off in the Treasury yields amid a risk-on market environment. Key US events awaited.
Gold prices hovered around six-month highs on Wednesday, cutting short a recent rally as traders bought back into the dollar in anticipation of more cues on monetary policy from the minutes of the Federal Reserve’s December meeting.
The yellow metal marked a strong start to the new year as concerns over a looming recession and a potential slowdown in U.S. interest rate hikes led to increased demand for safe havens apart from the dollar.
But the greenback recovered some lost ground on Wednesday, benefiting from uncertainty over the upcoming Fed minutes. Markets will be waiting to see if the members of the central bank supported a further easing in interest rate hikes during the December meeting, given that several inflation indicators showed that U.S. price pressures have likely peaked.
Markets are now pricing in an over 90% chance that the Fed will hike rates by an even smaller 25 basis points in February.