Gold, silver down after US Fed hikes rates

However, disappointing USA inflation data released the same day raised questions about whether the central bank will be able to hike rates again later this year.

Prices for gold inched higher on Friday as investors perceived that a selloff sparked by a rise in USA interest rates this week had run out of steam and the US dollar weakened, thus making bullion cheaper for holders of other currencies.

The losses in gold were limited, however, with bullion underpinned by a myriad of global uncertainties, including a report that US President Donald Trump was under investigation. "Just like in previous rate hikes, the next day the market starts looking at the probability of the next hike because everything was factored in beforehand", Natixis metals analyst Bernard Dahdah said.

The index of dollar stabled as the economic data of the US Employment benefits declined beyond than the expected.

Gold inched up on Wednesday as the market waited for direction from the outcome of a two-day US Federal Reserve meeting, with the central bank expected to hike interest rates and give indications on its monetary policy for the rest of the year.

Wall Street's top banks brought forward their expectations for when they think the Fed will begin reducing its $4.5-trillion bond portfolio to as early September, and see balance sheet reduction as more of a priority than another interest rate rise, a Reuters poll showed. "But there's still enough for people to worry about in geopolitics at different levels", Mr Dahdah said. US gold futures for August delivery were almost flat at $1,254.5 per ounce.

The August contract ended Thursday's session 1.67% lower at $1,254.60 an ounce.

Spot gold was up 0.1% at US$1,267.05 per ounce by 0806 GMT. Gold got some support from safe haven buying after the Washington Post reported that Trump was being investigated by special counsel Robert Mueller for possible obstruction of justice.

That said, Baruch spots support on the charts at around $1,250, which is just a bit below the metal's Wednesday morning high of $1,281.70.

Among other precious metals, silver was flat at US$16.86 per ounce.

"Price action in both gold and silver of late seems to imply that traders still have plenty of short-term long positioning on their books", said Jeffrey Halley, senior market analyst at OANDA. Palladium, which hit a 16-year high last week at $914.70, was down 0.1% at $883 an ounce.

  • Zachary Reyes