Gold prices are falling on expectations of Fed rate hikes

Expectations of a tightening of the Federal Reserve’s monetary policy and an earlier-than-expected increase in interest rates put pressure on gold as the dollar strengthens its positions. The dollar exchange rate against other major world currencies on January 26 reached its maximum amount since January 7. However, the investors’ desire to improve in safe assets in connection with the possible invasion of Russian forces into the territory of Ukraine is supporting this precious metal, the price of which remains near 10-week highs. During trading on Wednesday, gold fell 0.16% to $1,844.53 per troy ounce. According to some analysts, a more significant tightening of the Fed’s policy could lead to a decline in the gold price to $1,800 per ounce. At the same time, increased geopolitical tensions and the readiness of world leading countries to introduce a new package of sanctions against Russia in the event of an invasion of its forces into Ukraine caused an increase in the precious metals cost. The price of palladium increased by 2.59%, silver – by 0.23%, platinum – by 1.73%.


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Arseny Kudrin

Publicist, trader

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