GOLD STEADY, SILVER LOWER

GOLD PRICES struggled for direction yesterday as the US Federal Reserve’s hawkish stance clouded the outlook for non-yielding bullion, offsetting limited safe-haven buying and short-covering.

Spot gold was up 0.1% at $1 675.20 (about R29 637) an ounce by 4.30pm, after shedding more than 1% earlier in the session. US gold futures climbed 0.5% to $1 683.30 an ounce.

“Overall, the trend will continue to be negative for gold as the Federal Reserve told us yesterday (Wednesday) that they’re quite determined to increase rates,” said Bart Melek, head of commodity strategy at TD Securities.

Melek attributed a “marginal move” up in gold prices earlier in the US session to some short-covering amid a slight paring of the dollar’s gains.

The dollar gave up some recent gains, which supported bullion by making it less expensive for overseas buyers, but still held near its highs.

The US central bank, as widely expected, hiked its benchmark overnight interest rate by 75 basis points on Wednesday, and projected the policy rate would rise to the 4.25%-4.50% range by the end of 2022, and to a range of 4.50% to 4.75% by the end of 2023.

Interest rate hikes to fight soaring inflation tend to raise the opportunity cost of holding bullion.

Investors also took stock of US data showing initial claims for state unemployment benefits had increased to 213 000 against expectations for about 218 000 applications for the latest week.

“Heightened geopolitical concerns have prompted some slight safe-haven demand (in precious metals) and are keeping the speculative bears on the sidelines late this week,” Jim Wyckoff, senior analyst at Kitco Metals, said.

Silver dropped 0.2% to $19.56 an ounce, while platinum rose 0.3% to $909.84 and palladium added 1.2% to $2 180.99 an ounce.