Troilus Gold brings potential funding from ECAs to $1.3 billion
The company has signed an additional LOI with Export Development Canada worth $300 million.
Gold inched higher on Thursday as an easing dollar helped to offset pressure from the large interest rate hike by the US Federal Reserve earlier.
Spot gold was up 0.9% to $1,850.89 per ounce by 1 p.m. ET, reaching the $1,850 mark for the first time since last week. US gold futures had a more significant gain of 1.9%, trading at $1,853.80 per ounce in New York.
[Click here for an interactive chart of gold prices]
Buoying gold’s appeal among overseas buyers is the sharp decline in the US dollar, which recently hit its highest in two decades.
“A Fed that now seems committed to staving off inflationary pressures by raising rates is a bit of a drag on gold, keeping it choppy and in a range,” David Meger, director of metals trading at High Ridge Futures, told Reuters.
Bullion rose as much as 1.9% on Wednesday as the dollar retreated after the Fed approved its largest interest rate increase since 1994, but said such steep hikes may not be common.
Concerns about surging inflation also prompted other central banks to tighten monetary policies, with the Swiss National Bank unexpectedly raising its policy rate for the first time in 15 years and the Bank of England also increasing rates.
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“Gold’s safe-haven demand could fade further if the Fed successfully fights inflation without pushing the US into a recession,” predicted Carsten Menke, head of Next Generation Research at Julius Baer.
“Commodity trading advisor liquidations can likely continue to weigh on the yellow metal, increasingly adding pressure on this cohort to liquidate their longs,” TD Securities said in a note.
Goldman Sachs this week revised its short-term gold price targets, citing a large “wealth shock” following the economic impact of the lockdowns in China. Still, the bank maintained its upside outlook for the safe-haven metal.
(With files from Reuters)
