In the aftermath of the rising dollar, gold prices fell over 2.5% since yesterday as multiple markets were affected.
Gold futures were fixed at $1804 an ounce at the time of writing this report, having lost about $50 since yesterday.
Due to the re-appointment of the US Fed Chief, Jerome Powell, the dollar also increased in value and the yields on U.S. debt instruments increased sharply.
Higher yields and dollar strength combined to drive gold lower. A report from the White House stated that President Joe Biden is “fully confident that Chair Powell and Dr. Brainard will demonstrate strong leadership that America needs.”
The president will also be given the chance to reshape the Federal Reserve since three vacancies on the board of governors need to be filled. In early December, it is likely that he will name these members.
Many of today’s market moves, including the sale of gold and sharp rises in 10-year and 30-year Treasury notes, are linked to the comments made by multiple officials.
US interest rates could be raised by the Federal Reserve before the end of 2022, according to the central bank. In addition to the rapid economic recovery in the United States, these Fed members are concerned about the level of inflation.
According to President James Bullard of the St. Louis Federal Reserve, the central bank might have to accelerate its tapering process which began this month so that interest rates can be raised sooner than anticipated in an effort to temper rising inflationary pressures which further added selling pressure on the yellow metal momentarily.