Gold Futures Settle Higher For 2nd Straight Day On Safe-haven Demand
Gold futures settled higher on Wednesday, recording gains for a second straight day, with investors seeking the safe-haven commodity amid rising worries about global economic slowdown.
The Organization for Economic Cooperation and Development has slashed global growth forecast, saying global GDP will come in at 3% this year, lower than the 4.5% projection in December. The OECD said it opted to adjust its forecast due to the Russia-Ukraine war.
“The invasion of Ukraine, along with shutdowns in major cities and ports in China due to the zero-COVID policy, has generated a new set of adverse shocks,” the OECD said.
The World Bank has also cut global growth forecast, citing risks from geopolitical uncertainties due to the war in Ukraine and soaring inflation across the world.
The dollar’s recovery after a fall from higher levels, limited gold’s uptick. The dollar index, which climbed to 102.78 in the Asian session, dropped to 102.32 before recovering to 102.50.
Gold futures for August settled at $1,856.50 an ounce, up $4.40 or about 0.25% from the previous close.
Silver futures for July ended lower by $0.084 at $22.094 an ounce, while Copper futures for July settled at $4.4545 per pound, gaining $0.0190.
Investors also looked ahead to the European Central Bank’s monetary policy announcement, due on Thursday, and the U.S. inflation data, due on Friday.
The ECB is set to draw a line under its massive bond-buying stimulus program on Thursday and signal its first-rate hike in over a decade. Amid increasing signs of inflation, markets are now pricing in 75 basis points of increases by September.
The U.S. Federal Reserve is expected to raise its benchmark funds rate by 50 basis points next week and again in July.
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