Huayou seeks $2.7 billion for Ford-backed Indonesia nickel plant
The fundraising comes as benchmark nickel prices trade near a four-year low amid weaker demand from the stainless steel market.
Gold continued to decline on Thursday as both the US dollar and Treasury yields rose after Federal Reserve Chair Jerome Powell shifted the central bank’s inflation target in a widely expected move.
Spot gold fell 1.4% to $1,925.35 per ounce by 1:15 p.m. EDT after falling to a two-week low earlier in the session (prices had risen as much as 1.1% during Powell’s speech). US gold futures depreciated 1.2% to $1,929.00 per ounce in New York.
“The Fed saying it will allow modest overshoot in inflation is very positive for gold,” Daniel Ghali, commodity strategist at TD Securities, told Reuters.
“But the market already anticipated that so there is no new impetus to buy gold,” he added.
“The Fed saying it will allow modest overshoot in inflation is very positive for gold”
Daniel Ghali, commodity strategist, TD Securities
Earlier in the day, the US central bank rolled out an aggressive new strategy of having inflation rates run “hotter than normal” to support the labor market and the broader economy.
Since the central bank officially set its inflation target at 2% in 2012, the Fed’s preferred measure of price increases has consistently fallen short of that objective, averaging just 1.4%.
The Fed will now seek to achieve its average inflation goal over time by allowing inflation rates to run moderately above 2% “for some time” to offset periods that had sub 2% inflation.
Weighing on bullion, the US dollar gained against other major currencies, while longer-term US Treasury yields moved to their highest levels in months.
“Powell’s speech sparked a roller coaster ride for asset markets, especially gold, which rallied nearly $50 but completely reversed as the market realized he didn’t provide any surprises that hadn’t been mooted earlier,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
Over the past few months, the Fed had pumped in massive stimulus and kept interest rates near zero to lift the economy from the impact of the covid-19 pandemic. These measures had sparked investor demand for safe-haven assets and driven gold to multiple record highs throughout the year.
(With files from Reuters)
