Gold rose on Friday morning in Asia. Its price increased after key central banks tightened their monetary policies at their respective meetings this week.
Gold futures gained 0.32% to $1,803.95 by 11:14 PM ET (4:14 AM GMT), set for their best week since mid-November 2021. The U.S. dollar, which usually moves inversely to gold, fell on Friday.
Major central banks are tightening monetary policies to calm high inflation. They are also keeping an eye on the impact of Covid’s new variant.
The Bank of Japan made the decision not to change its interest rate. The country’s central bank maintained its dovish tone but could reduce emergency Covid-19 funding.
The Bank of England made an interesting decision. The central bank decided to increase its interest rate to 0.25%, becoming the Group of 7 central banks to hike interest rates since the beginning of Covid-19.
Gold and the Federal Reserve
In the meantime, the European Central Bank (ECB) boosted regular monthly bond-buying for half a year. The ECB handed down its policy decision the same day as the Bank of England.
This week, the Federal Reserve provided multiple indications that its ultra-thin policy is coming to an end. It is worth mentioning that the central bank will accelerate the reduction of its monthly bond purchases.
It will be buying $60 billion of bonds each month starting in January. The central bank was tapering by $15 billion a month in November, doubled that in December, and will accelerate the reduction in 2022.
As stated above, the price of gold rose on Friday morning. Let’s have a look at other precious metals as well. Silver and platinum fell 0.1%, while palladium gained 1.1%.
COMMENTS