Gold Loses its Luster After Fed’s Statements

Gold prices fell on Thursday as investors expected the Federal Reserve (the US central bank) to scale back its bond-buying program faster to counter soaring inflation despite economic concerns over the spread of the new mutated Omicron.

Gold fell in immediate transactions 0.3 percent to 1777.87 dollars an ounce (an ounce). US gold futures fell 0.3 to $ 1778.10.

Testifying before Congress on Wednesday, Federal Reserve Chairman Jerome Powell said the central bank must be prepared to respond to the possibility that inflation does not subside in the second half of 2022.

Powell also said the bank would consider ending its bond-buying program faster at its December 14 meeting.

Gold is usually seen as a way to hedge against inflation, but reducing stimulus measures and raising interest rates to push government bond yields up, increasing the opportunity cost of buying non-yielding gold.

As for other precious metals, silver rose in spot transactions 0.5 percent to $22.42 an ounce. Platinum rose 0.7 percent to $940.09, while palladium rose 0.5 percent to $1,756.46.