Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
Gold traded around $1,300 an ounce Wednesday, finding some support from bargain hunters after weakening for two straight days.
But a stronger U.S. dollar and a shift of funds from falling bullion to rising stocks continued to put downward pressure on the yellow metal, which touched a nearly four-week low on Tuesday.
Gold futures for August delivery changed hands at $1,300.70 an ounce in early afternoon trading Wednesday on the Comex division of the New York Mercantile Exchange, up 0.28%, or $3.60, from Tuesday’s close of $1,297.10.
Earlier on Tuesday the price dropped to $1,292.60, the lowest since June 19.
On Wednesday, the greenback rose against a basket of currencies on higher U.S. Treasury yields and speculation about the timing of an interest rate hike, according to Reuters.
Stocks also gained ground worldwide, buttressed by strength in miners after better than expected growth in China, the news agency said.
Rate concerns
Worries that the Federal Reserve might raise interest rates earlier than anticipated also dampened demand for safe-haven gold.
“If the labor market continues to improve more quickly than anticipated by the Committee, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target likely would occur sooner and be more rapid than currently envisioned,” Fed Chair Janet Yellen said Tuesday.
Amid higher rates, investors tend to move from gold, which pays no interest, to assets such as bonds, which do.
