Logo of Phnom Penh Post newspaper Phnom Penh Post - Fed interest rate move to pressure gold price

Fed interest rate move to pressure gold price

Content image - Phnom Penh Post
G-Link business manager Chhea Chhayheng.

Fed interest rate move to pressure gold price

Gold prices fell on Tuesday, approaching their lowest level since mid-February, as the prospect of a rate hike by the US Federal Reserve and a stronger greenback dampened the attractiveness of bullion.

Gold prices have dropped drastically this week from $1,998 to $1,860 per ounce. The bearish external market factors of a strong US dollar near a 20-year high and higher US Treasury yields hit precious metals early this week.

The US central bank’s Federal Open Market Committee is likely to raise interest rates by 0.5 per cent this week, amid the highest inflation levels in 40 years.

Higher interest rates will put pressure on gold, as will a stronger dollar, according to Chhea Chhayheng, business manager at G-link.

Gold faces short-term downside risks, with a target range of $1,810 to $1,790, according to Reuters.

The strengthening dollar is making gold less appealing to global investors, while benchmark 10-year Treasury yields touched three per cent for the first time since December 2018, a significant psychological milestone, said Reuters.

To counter rising inflation and high labour costs, US policymakers appear set to deliver a series of aggressive rate hikes at least until the summer, reported Bloomberg.

Reuters reported that while gold is typically regarded as an inflation hedge, rate hikes will raise the opportunity cost of holding non-yielding bullion.

Technically, gold prices are moving in a downtrend on the daily bar chart.

Bears have the overall near-term technical advantage and gained more power today, while the next near-term downside price objective for bears is pushing futures prices below solid technical support at $1,800, reported Kitco.

The first resistance is seen at $1,883 and then at $1,900, and the first support is seen at a low of $1,853.40 and then at $1,800.

Content image - Phnom Penh Post

MOST VIEWED

  • Angkor lifetime pass, special Siem Reap travel offers planned

    The Ministry of Tourism plans to introduce a convenient, single lifetime pass for foreign travellers to visit Angkor Archaeological Park and potentially other areas. The move is designed to stimulate tourism to the culturally rich province of Siem Reap as the start of the “Visit

  • Bosba: The first Khmer woman composer from UK’s Cambridge

    Bosba Panh is just 25 years old, but she’s already accomplished some impressive milestones for herself and the Kingdom. On July 24, she graduated with a Master’s degree from the University of Cambridge as the first Khmer woman composer and Khmer music graduate ever at

  • ‘Golden’ Angkor Wat likely due to natural phenomenon: ANA

    Pictures and video clips of the Angkor Wat temple, its spires seemingly coated in gold, have been shared tens of thousands of times on social media, prompting a sense of wonder among those who have seen them. Hong Sam Ath, who took the pictures and

  • Pailin longan winery tries to break through to the big time

    Longan aren’t quite as glamorous as some fruits. They don’t have the star-power of mangos or generate the excitement of a pricey seasonal niche fruit like the pungent durian. Unlike bananas or oranges, which are known and loved everywhere, longan remains a decidedly

  • Debt restructuring over, time to tackle rising NPL ratio

    The Cambodian banking system has just completed a 26-month debt restructuring exercise where scores of loan accounts were revised, classified and provisioned as the rate of non-performing loans inched up, sparking a slight credit risk unease Implemented in April 2020, the Covid-19 debt restructuring measures came

  • Koh Slaket studio resort brings culture with style

    Davitra (Cambodia) Co Ltd’s multi-million-dollar 13ha Koh Slaket studio-cum-resort just east of the capital was inaugurated in the first phase on August 6, providing national and international tourists with a new travel option and job opportunities for locals. The man-made cultural and scenic lakefront getaway