The price of gold took a hit today after nearing the $2,000 mark earlier in the day. The precious metal fell victim to profit-taking ahead of the weekend and hawkish comments from a Federal Reserve official.
Gold hit a high of $1,993.49 before tumbling lower, reversing all gains to trade at $1,981.38 by late afternoon.
Boston Fed President Susan Collins said evidence shows inflation is easing but she’s not ready to rule out further rate hikes if needed. Her comments came as markets have priced in an end to the Fed’s rate hike campaign that took interest rates from near zero last spring to the current 5.25-5.50% target range.
Deutsche Bank analysts said the recent easing of financial conditions could spur more hawkishness from the Fed, but inflation and job gains allow room for less concern.
The Fed has signalled it intends to sustain higher rates longer, which hampers gold. Rising rates lift the opportunity cost of holding non-yielding bullion.
