Gold prices sank 1.7 percent on Thursday, marking the worst single-day performance in 3 months. The anti-fiat yellow metal was pressured during a busy 24 hours of central bank interest rate decisions throughout the European trading session.
These included the Swiss National Bank, the Bank of England and the European Central Bank. This also followed the Federal Reserve on Wednesday as it hiked rates.
The SNB, BoE and ECB all raised interest rates to continue the battle against the highest inflation in decades despite rising concerns about the state of global growth. The most notable of the three was the ECB, which surprised markets with a much more aggressive stance than expected.
The central bank said that rates “need to rise significantly, at a steady pace” as it revised upward inflation projections.
In just 24 hours, the markets added over 30 basis points in tightening expected from the ECB one year out. This did not bode well for the anti-fiat yellow metal, which has been pressured this year by central banks raising interest rates and pushing up government bond yields.
The more hawkish ECB also induced risk aversion, plunging equity markets. On Wall Street, the Dow Jones sank 2.35%. This boosted demand for the haven-linked US Dollar, further pressuring gold.
This Post Has One Comment
Wow, superb blog layout! How lengthy have you been running a blog for?
you made running a blog look easy. The whole glance of your site is excellent,
as neatly as the content material! You can see similar here najlepszy sklep