Continuous hike in Interest Rate May Likely Pile up Pressure on Gold — Market Talk
WORLD, Sept. 27 – Interest rates staying higher for longer is likely to pile up pressure on the prices of gold, with uncertainty driving investors to other haven assets.
The Prices of gold are presently sitting at $1,913 a troy ounce–a six-month low for the precious metal, Market Talk learnt.
This pressure is likely to continue, according to Nicky Shiels, Metals Strategist at MKS PAMP. “The narrative is collectively turning bearish for gold and with a risk-out mentality across markets,” Shiels says in a note. ”
“It doesn’t matter, now, that rates will likely be lower next year than this year, as broader macro markets don’t like the uncertainty the ‘higher for longer’ narrative brings and that has implications for gold.” Shiels adds that higher oil prices were also a headwind, given $100-a-barrel oil could fuel inflation.