Gold prices fell on Thursday ahead of the US Federal Reserve’s meeting next week and growing fears of a looming recession.
The yellow metal futures for February delivery were trading lower by 0.19% to $1,794.50 per ounce on December 08. This fall came amid the rising interest rates and persistent inflation that may cause a recession in the US in 2023.
Moreover, the interest rate hikes pushed down gold prices this year despite its status of being a hedge against inflation. Currently, investors are waiting for details from Fed’s upcoming meeting.
Although the inflation eased in October, concerns over the jobs market and consumer spending caused some worry for the coming months.
In light of this, the US central bank warned that the rates could peak at higher-than-expected levels.
Meanwhile, most experts expect Fed to announce a 50-basis point rate hike in its meeting on December 13-14.
According to an analyst, gold might trade between $1,765.00 to $1,795.00 per ounce ahead of the Federal Open Market Committee gathering.
Furthermore, some investors believe the yellow metal will have difficulty building its momentum in the coming days.
On the other hand, gold may rise a bit if the market prediction comes in line with the Fed result.
China Reports Gold Reserve Increase
On Wednesday, the People’s Bank of China released data that revealed an increase in the country’s gold reserve.
According to the institution, Beijing’s holdings soared by 32.00 tons in November, which brought it to a total of 1,980.00 tons.
In general, such an amount ranked as the sixth biggest gold hoard in the world.
During the third quarter, the market was full of speculations over the unknown buyers of almost 400.00 tons of bullion. At that time, most experts believed that the culprits were China and Russia.
However, both countries have been known to announce their holdings with a long-time differential. In particular, Beijing tends to publish its gold reserve between 3 to 6 years.
