Gold Slips Toward Weekly Loss as Oil Prices Lift Fed Hike Bets
Gold prices edged lower Friday, on pace for a weekly decline as rising oil prices stoked fears of more Federal Reserve interest rate hikes.
Gold futures retreated Friday, putting the precious metal on track for a weekly loss as climbing oil prices renewed investor concerns that the Federal Reserve may need to raise interest rates further to contain inflation.
Higher energy costs tend to filter through the broader economy, pushing up consumer prices and complicating the Fed's efforts to bring inflation back to its 2% target. That dynamic has historically weighed on gold, which yields nothing and becomes less attractive relative to interest-bearing assets when rate-hike expectations rise.
Read more Scholastic Posts Wider Q1 Loss, Keeps Full-Year Outlook Intact →
Oil's recent advance has sharpened market anxiety about the inflation outlook, prompting traders to reassess how long the Fed might maintain restrictive monetary policy. Those recalibrated expectations have pressured gold, which had been benefiting from earlier bets that the central bank was nearing the end of its tightening cycle.
Gold is highly sensitive to shifts in real interest rates and the U.S. dollar. A firmer dollar, often associated with a more hawkish Fed stance, makes dollar-denominated commodities such as gold more expensive for foreign buyers, adding an additional layer of downward pressure on prices.
Continue reading at All News for the latest commodity market updates and Federal Reserve analysis.
