El Salvador lawmakers overturn mining ban in win for president
The legislation will grant the Salvadoran government sole authority over mining activities within the country's land and maritime territory.
Gold prices climbed higher on Wednesday, undeterred by elevated US bond yields and a firm dollar, as the Federal Reserve announced it expects to keep its benchmark interest rate pinned near zero through 2023.
Spot gold advanced 1.0% to $1,748.59 per ounce by 3:40 p.m. EST. US gold futures also rose 1.0% to $1747.60 per ounce in New York. More than 20 million ounces worth $35 billion was traded by mid-afternoon.
Shares of gold miners also enjoyed gains following the latest price rally. Top producers Barrick Gold and Newmont both surged by more than 2% near market close Wednesday. SPDR Gold Trust, the largest gold-backed ETF, also had a modest gain of 0.7%.
Meanwhile, benchmark US Treasury yields scaled a new 13-month high, sapping non-yielding gold’s appeal. The dollar index also held steady, which kept the cost of holding bullion high for other currency holders.
Earlier in the day, analysts predicted that the Fed is prepared to tolerate higher inflation, which could send bond yields further up as investors anticipate rising inflation, keeping gold in check for the time being.
“Powell will (likely) state that inflationary pressures will probably be temporary and not that big … that will probably push up 10-year yields, the dollar and hurt gold a bit,” David Madden, an analyst at CMC Markets UK told Reuters earlier, adding that bullion could fall towards $1,600 in the coming months.
“The Fed announcement and the $1.9 trillion financial package are the only two bullish aspects for gold. All other fundamentals are on the negative with the stronger dollar and yields,” said Hareesh V, head of commodity research at Geojit Financial Services.
(With files from Reuters)
