Logo of Phnom Penh Post newspaper Phnom Penh Post - US interest rate hikes continuing gold downtrend

US interest rate hikes continuing gold downtrend

Content image - Phnom Penh Post
Long Samnang, business manager at PPLS

US interest rate hikes continuing gold downtrend

The price of gold has continued in a downtrend fuelled by a stronger US dollar supported by interest rate hikes to tackle rising inflation.

“Consecutive interest rate hikes in 2022, even more than its basic 0.25 phase, have kept the US currency as still the favourite derivatives product for traders to keep track of and get benefit from,” said PP Link Securities business manager Long Samnang.

According to the Federal Open Market Committee (FOMC) statement issued by the Federal Reserve on September 21, the target range of the federal funds rate is now 3.25 per cent from three per cent.

The statement said the purpose of raising interest rates was to promote maximum employment, with a long-term inflation target of two per cent, far off the 8.3 per cent in August.

Such support for the dollar would cause gold to disappreciate in the long run, Samnang added.

Investing.com’s Ambar Warrick reported: “Gold and copper prices retreated further on Monday as the dollar notched a new 20-year high amid growing fears of rising interest rates and a potential recession.

“Metal markets plummeted last week after the US Federal Reserve hiked interest rates and warned of potential economic pain as it looks to combat runaway inflation.

“Economic indicators from the Eurozone and the UK also showed a pronounced contraction in business activity, ramping up fears of a recession and denting the demand outlook for metal markets.”

As well as these fundamental indicators, technical analysis based on one-hour and four-hour chat views is still showing a downward pattern for gold.

Therefore, for this week’s trading recommendation, market expert Samnang advises traders to sell the precious yellow metal accordingly.

Alternatively, traders could wait to buy gold when the price is between $1,610 to $1,620 per ounce, setting the take-profit function at $1,645 per ounce and the stop-loss at $1,597.

Content image - Phnom Penh Post

MOST VIEWED

  • Hong Kong firm done buying Coke Cambodia

    Swire Coca-Cola Ltd, a wholly-owned subsidiary of Hong Kong-listed Swire Pacific Ltd, on November 25 announced that it had completed the acquisition of The Coca-Cola Co’s bottling business in Cambodia, as part of its ambitions to expand into the Southeast Asian market. Swire Coca-Cola affirmed

  • Cambodia's Bokator now officially in World Heritage List

    UNESCO has officially inscribed Cambodia’s “Kun Lbokator”, commonly known as Bokator, on the World Heritage List, according to Minister of Culture and Fine Arts Phoeurng Sackona in her brief report to Prime Minister Hun Sen on the night of November 29. Her report, which was

  • NagaWorld union leader arrested at airport after Australia trip

    Chhim Sithar, head of the Labour Rights Supported Union of Khmer Employees at NagaWorld integrated casino resort, was arrested on November 26 at Phnom Penh International Airport and placed in pre-trial detention after returning from a 12-day trip to Australia. Phnom Penh Municipal Court Investigating Judge

  • Sub-Decree approves $30M for mine clearance

    The Cambodian government established the ‘Mine-Free Cambodia 2025 Foundation’, and released an initial budget of $30 million. Based on the progress of the foundation in 2023, 2024 and 2025, more funds will be added from the national budget and other sources. In a sub-decree signed by Prime Minister Hun Sen

  • Two senior GDP officials defect to CPP

    Two senior officials of the Grassroots Democratic Party (GDP) have asked to join the Cambodian People’s Party (CPP), after apparently failing to forge a political alliance in the run-up to the 2023 general election. Yang Saing Koma, chairman of the GDP board, and Lek Sothear,

  • Cambodia's poverty cut in half from 2009 to 2019: World Bank report

    A report published by the World Bank on November 28 states that Cambodia’s national poverty rate fell by almost half between 2009 and 2019, but the Covid-19 pandemic recently reversed some of the poverty reduction progress. Cambodia’s poverty rate dropped from 33.8 to 17.8 per cent over the 10