El Salvador lawmakers overturn mining ban Bukele called absurd
El Salvador became the first country in the world to ban all forms of metals mining in 2017.
Gold prices held ground on Thursday after dropping from a 13-month high during the previous session, as risk sentiment was buoyed by the US central bank staying firm to its commitment to fighting inflation with rate hikes.
Spot gold moved up slightly by 0.1% to $1,931.34 per ounce by 12:10 p.m. ET, while US gold futures rose 0.5% to $1,932.70 per ounce in New York.
[Click here for an interactive chart of gold prices]
On Wednesday, US Federal Reserve Chair Jerome Powell backed a quarter-point interest-rate hike this month to commence a series of increases. He also didn’t rule out a larger move at some stage, despite uncertainty caused by the military crisis in Europe.
“The Federal Reserve is expected to start raising rates with only a quarter-point move, which means the central bank is even further behind the curve on in its inflation fight and that should be good for gold,” ED&F Man Capital Markets analyst Edward Meir told Reuters.
Investors are now looking out for more clues on US interest rate hikes as Powell’s Congress testimony enters its second day.
Meanwhile, another precious metal has been enjoying monstrous gains over the past week.
Palladium extended its gains and surged to a 7-month high on Thursday on growing concerns of a supply shortage following the sanctions imposed against Russia, the top producer. The metal used to make catalytic converters soared to $2,800.50 an ounce earlier in the session, its highest since June 2021.
“Palladium is the one commodity from Russia which accounts for a sizable amount of exposure to the country. So it is in the sweet spot in terms of its impact,” Meir said.
“These sanctions have been designed to enable continued trade of commodities the West relies on, so any impact we’re seeing is unintentional to an extent and will contribute to higher prices, at least for now,” added Craig Erlam, senior market analyst at OANDA.
(With files from Bloomberg and Reuters)
