Gold Prices Climb Again Following Drop

After a nearly 3% decline in a single day, gold prices have risen again in the global market. The news agency Reuters reported that concerns over the US Federal Reserve potentially raising interest rates next month, following a higher-than-expected inflation rate in the United States, have impacted the gold market.

On Wednesday (November 11), around 9 AM Bangladesh time, spot gold prices rose by 0.3 percent to stand at $4,043.62 per ounce. The previous day, Tuesday, prices had fallen by almost 3 percent to $4,017.21 per ounce.

Meanwhile, in the United States, gold futures for December delivery increased by 0.5 percent, reaching $4,051.10 per ounce.

Reuters reported that statistics on US inflation, released on Tuesday, showed that the country’s inflation rate in October rose more than anticipated. In this situation, investors are predicting that the Fed might increase interest rates by half a percentage point this coming December.

According to data from CME’s FedWatch Tool, market traders now believe there is a 100 percent probability of a rate hike in December. Prior to the release of the inflation data, this probability stood at 84 percent.

Market analyst Matt Simpson stated that a temporary recovery is being observed in the gold market following the previous day’s significant decline. A portion of investors are cashing in profits. Concurrently, high inflation in the US and indications of a hawkish Fed policy have further strengthened expectations of an interest rate increase.

Gold is generally considered a hedge against inflation. However, when interest rates rise, the opportunity cost of holding non-yielding assets like gold increases. This could diminish gold’s attractiveness to investors.

Meanwhile, prices of other precious metals have also risen. In the spot market, silver prices climbed by 1.7 percent to $52.38 per ounce. During the same period, palladium prices increased by 1.3 percent, reaching $1,038.38 per ounce.

The post Gold Prices Climb Again Following Drop appeared first on Bangla Online News Portal.