Gold Prices Rallies Amid Trending Slower Pace of Interest Hiking

GOLD prices rallied on Thursday, erasing this week’s previous 1.4% drop in Dollar terms as the US currency retreated once more on the FX market ahead of next week’s expected slowdown in Federal Reserve rate hikes, helping New York equities push higher despite a rise in longer-term interest rates in the bond market.

Silver also gained once more, rising back towards last week’s highs above $23 per ounce, a level not seen since May. Gold prices are touching $1790 per ounce versus the previous closing at $1785, Euro priced bullion edged back up to €1700.

The UK gold price in Pounds per ounce also erased the last of its previous 1.0% drop for the week, trading at £1465.

The weaker dollar as inflation recedes could provide support for gold, according to a 2023 outlook from the mining industry’s World Gold Council, while “a mild recession, and weaker earnings have also historically been gold-positive.

But long-term bond yields are likely to remain high [and] pressure on commodities due to a slowing economy is likely to provide headwinds to gold in the first half of 2023/

Australia’s GDP growth and China’s latest import/export data both missed analyst forecasts on Wednesday, but economic growth across the Eurozone showed less of a slowdown than expected for the July-September quarter at 2.3% per year while jobs growth accelerated to 1.8% per year.

Poland’s central bank held its key rate unchanged at 6.75% for a 3rd month running yesterday after inflation slipped back to 17.4%, while Brazil stuck at 13.75% with inflation now down to 6.5%.

Facing inflation of 6.9% per year – down from June’s 4-decade peak of 8.1% – the Bank of Canada meantime raised its key interest rate by half-a-point to 4.25%, ending a run of 0.75-point hikes.

The same slowdown from 0.75 to half-point rate rises is also expected in next week’s decisions from the European Central Bank and the Bank of England on Thursday, and before them the US Federal Reserve on Wednesday.