[Click here for an interactive chart of gold prices]
The greenback and bond rates sold off after the Wall Street Journal reported that some Fed officials are concerned about overtightening, after having raised the policy rate by 3 percentage points since March, with another three-quarter point increase anticipated next month.
“Gold is staging a comeback as expectations grow that this next 75 basis-point hike will be the last major one,” Ed Moya, senior market analyst at Oanda, said in a Bloomberg note.
“The peak of Fed tightening appears to be right around the corner and that is good news for bullion,” he added.
The Fed’s relentless monetary tightening to fight inflation this year has sent bullion down about 20% from its March peak, with investor holdings of gold-backed exchange-traded funds — a key pillar in driving prices to record-highs in 2020 — set to record a net outflow this year.
(With files from Bloomberg)