Gold moved back above $4,300 per ounce on Wednesday as markets prepared for the Federal Reserve’s latest interest rate decision.
Spot gold traded around $4,350 during the session, recovering after falling to its lowest level in more than a month. The rebound followed recent pressure from a stronger US dollar and higher Treasury yields.
Markets are focused on an expected 25 basis point rate increase, which would lift the federal funds target range to 3.75% to 4.00%. Because that move is already widely expected, the main focus is likely to be the Federal Reserve’s guidance on what comes next.
Comments from Chair Kevin Warsh could therefore have a greater impact on gold than the rate decision itself. Any indication that further increases are likely could support the dollar and Treasury yields, creating fresh pressure on the metal.
The US 10-year yield was close to 4.99% after reaching about 5.04% on Tuesday, its highest level since 2007. Higher yields increase the appeal of interest-bearing assets compared with gold, which pays no income. That creates a clear headwind for the metal while borrowing costs remain elevated.
Oriole Resources plc (LON:ORR) is an AIM-listed gold exploration company, focused on Cameroon and West Africa. Their main activity is exploration in Cameroon, where the Company identified multi-kilometre long gold anomalies within its Central Licence Package, including at its flagship Mbe project.
