Update: Gold Rises Despite a Higher Dollar as the Fed's Policy Meeting Begins, International Tensions Continue
5 minutes ago by MT Newswires
02:08 PM EST, 01/25/2022 (MT Newswires) -- Gold to the highest in more than two months on Tuesday even as bond yields and the US dollar strengthened as investors move to safe haven assets as the Federal Reserve's policy committee begins a two-day meeting that could end with higher US interest rates and international tensions continue.
Gold for April delivery closed up US$10.80 to settled at US$1,855.00 per ounce, the highest since Nov.18.
The rise comes as the Federal Open Market Committee begins its meeting amid inflation that has climbed to the highest in 40 years. The central bank is expected to soon begin raising rates as it moves away from the ultra-loose monetary policy put in place early in the pandemic.
The threat of higher rates is roiling equities, with US stock markets falling as much as 4% on Monday before ending higher as bargain hunters stepped in and US markets were mostly lower on Tuesday. Investors are moving to safe haven assets like gold, bonds and the dollar on the threat of higher rates and as international tensions continue to rise as Russia masses troops and materiel on its border with the Ukraine ahead of a possible invasion.
The ICE dollar index was last seen up 0.09 points to 96.01, making gold more expensive for international buyers. The yield on the US 10-year note was last seen down 1 basis points to 1.781% as bond prices rise, bearish for gold since it offers no interest.