Spot Gold Erases Gains as Fed Sees Chance of Earlier Rate Hikes
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(Bloomberg) -- Gold erased gains after Federal Reserve officials said a strengthening economy and rising inflation could spur faster interest-rate increases.
Officials flagged the view in minutes of the Dec. 14-15 meeting of the U.S. central bank’s policy-setting Federal Open Market Committee, published Wednesday.
Bullion fell last year in its biggest annual decline since 2015 as central banks started to dial back pandemic-era stimulus to fight inflation. Higher rates can dim demand for the metal because it doesn’t pay interest.
The market was interpreting that “there’s very likely a March hike followed by quantitative tightening, which is very bad for stocks and gold,” said Jay Hatfield, chief executive officer of Infrastructure Capital Management in New York.
Bullion for immediate delivery slipped 0.1% to $1,812.79 an ounce by 2:59 p.m. in New York, after rising as much as 0.8% earlier.
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