Gold Prices Hit Multi-Week Lows as UK ‘Hints’ at Rate Rise, US Risks Syria Stand-Off with Turkey
Gold Prices Hit Multi-Week Lows as UK ‘Hints’ at Rate Rise, US Risks Syria Stand-Off with Turkey by Adrian Ash – Financial Sense
Gold prices bounced $10 per ounce from new 5-week lows against a rising US Dollar in London on Thursday, rallying to $1316 as Western stock markets also fell hard once again.
Commodities held flat, but major government bond prices dropped, driving longer-term interest rates higher.
Benchmark UK Gilt yields neared the highest since March 2016 – back before the shock Brexit referendum result on quitting the European Union – after the Bank of England forecast rising inflationary pressures over the next 2-3 years.
Widely reported as “hinting” at rate hikes to come, the Bank, however, voted unanimously to keep UK interest rates on hold, with no change to its current £445 billion stock of QE bond purchases.
A rally in Sterling nonetheless helped push gold priced in the British Pound down to 8-week lows before it rallied off £935 per ounce.
Ten-year US Treasury yields neared fresh 4-year highs at 2.87%, but short-term interest rates held steady as the US Congress prepared to vote on approving a two-year budget deal, set to expand military as well as domestic federal spending.
“This is a bipartisan bill. We are going to deliver our share of support,” said Republican House Speaker Paul Ryan, aiming to avert a government shutdown as the much-deferred deadline on the US debt ceiling approached yet again,
US troops supporting Kurdish forces in Syria meantime risk coming into conflict with fellow Nato-member troops from neighboring Turkey around the town of Manbij, the New York Timesreports.
Announcing the second summit regarding Syria’s future with the leaders of Russia and Iran, Turkey’s President Recep Tayyip Erdoğan today said his army’s ‘Operation Olive Branch’ aims to help “our refugee brothers and sisters to return to their land, to their homes.