Gold Futures Settle Higher On Safe-Haven Buying

Gold futures settled higher on Friday, rebounding from recent losses, despite the latest round of interest rate hikes by some central banks and hawkish comments from several Fed officials.

Gold prices edged higher on the previous metal’s safe-haven appeal, as riskier assets such as stocks drifted lower amid worries about inflation and an economic slowdown.

The dollar surged higher after U.S. Fed Chair Jerome Powell reiterated plans to continue raising interest rates during his second day of testimony on Capitol Hill.

The dollar index, which surged to 103.17 in the Asian session, eased to 102.90 later on, but still remained up in positive territory with a gain of over 0.5%.

Gold futures for August ended higher by $5.90 at $1,929.60 an ounce.

Silver futures for July ended down $0.113 at $22.354 an ounce, while Copper futures for July settled at $3.8035 per pound, down $0.0865 from the previous close.

After tumbling to the $1,920 an ounce level, gold is starting to attract safe-haven flows as the stock market selloff intensifies.

“Gold got an added boost after the Fed’s Bostic said he favors no more rate hikes for the rest of the year. The rebound however lost some steam after the latest PMI data isn’t showing enough weakness in the service sector to warrant a pause,” says Edward Moya, Senior Market Analyst at OANDA.

“PCE readings and comments from Fed Chair Powell will be key for Fed’s policy stance,” adds Moya. “If swap futures start to believe the Fed will likely deliver two more rate increases, gold could remain vulnerable. However, if risk aversion runs wild, gold could see some flight to safety flows. Gold has key support at the $1900 level and resistance at the $1960 region.”

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