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Tuesday, April 26, 2022 - 13:17:25
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Mining News Pro - Gold prices slipped further on Monday as prospects of aggressive policy tightening by the US Federal Reserve and a stronger dollar dimmed the precious metal’s safe haven appeal.
Spot gold dropped 1.7% to $1,896.42 an ounce by 12:25 p.m. ET, the first time it fell below $1,900 in four weeks. US gold futures slumped by 2.0% to trade at $1,896.00 an ounce.
“It seems that the fears about rate hikes have gotten the upper hand as of late,” Julius Baer analyst Carsten Menke told Reuters.
With expectations for a half-percentage point interest rate hike at the Fed’s May meeting now locked in, traders on Friday piled into bets that the US central bank will go even bigger in subsequent months in order to tame soaring inflation.
“We would think that the inflationary pressures are about to ease and that should take away some of the safe haven demand we’ve seen for gold,” Menke added.
As a result, Menke has set a three-month price target of $1,850, as he believes “gold is rather expensive as a safe haven asset.”
UBS analyst Giovanni Staunovo said mobility restrictions in China is also weighing on physical demand for gold.
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