Gold Traders Brace For More Fed Hikes As It Hits Lowest Level Since January

On Friday, as the U.S. dollar continued to rise on the strength of hawkish Federal Reserve language and shifting expectations over the number of expected interest-rate rises, gold futures reached their lowest level of the year.

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Price Movement

• After trading as low as $1,827.70 earlier in the day, the price of gold for April delivery (GC00, -0.81% GCJ23, -0.80%) dropped $14.90, or 0.8%, to $1,836 per ounce on Comex.
• The price of an ounce of March silver SI00, -1.91% SIH23, -1.91% fell by 41 cents, or 1.9%, to $21.40.
• Platinum for April delivery PLJ23, -1.69% declined by $16, or 1.7%, to $915 per ounce, while palladium for March delivery PAH23, -4.14% sank by $69.20, or 4.5%, to $1,456.50 per ounce.
• To reach $4.082 per pound in March HGH23, -1.35%, copper prices dropped by 5 cents, or 1.3%.

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Market Forces

Early on Friday, when U.S. stocks declined and the dollar and Treasury yields climbed higher, gold prices fell to their lowest point in six weeks and silver to their lowest point in ten.

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The Federal Reserve is expected to continue raising its policy interest rate in March, May, and possibly June as well, according to analysts, who explained the movement in the price of yellow metal.

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The market is now concerned that the Federal Reserve will continue to take an excessively hawkish stance. "Central banks are tightening their monetary policies to impede economic growth and so tamp down inflation, and metals dealers view that idea as gloomy for the prospects of global demand," said Jim Wyckoff, senior analyst at Kitco.com.

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Traders have increased the likelihood that the Fed will continue raising interest rates until June.