Sept 23 (Reuters) – Gold prices held a narrow range on Friday as the dollar steadied near a 20-year peak, while the likelihood of more aggressive interest rate hikes by the US Federal Reserve going forward also weighed on the non-yielding bullion’s appeal.
Spot gold was flat USD 1,670.19 per ounce by 0658 GMT, while US gold futures fell 0.2% to USD 1,678.20.
“I expect prices to remain choppy in the near-term, as the market has already discounted the (75 bps) rate hike, that is why we are not seeing a big fall in the prices,” said Ajay Kedia, director at Kedia Commodities, Mumbai.
“We see USD 1,650 as support and USD 1,720 as resistance… The expectations of further rate hike is capping gold’s upsides.”
A number of central banks, from Indonesia to Norway, raised their interest rates on Thursday, following the US central bank’s third straight 75-basis-point hike.
The actions by major central banks have stoked concerns of a global recession.
Though gold is seen as a hedge against inflation and economic uncertainties, rising rates dull bullion’s appeal since it yields no interest.
Gold prices have fallen nearly 20% since scaling above the key USD 2,000 per ounce mark in March.
“The dominant drift in the minds of global investors is currently toward the realisation that the economies of Europe and the US are in serious trouble,” said Clifford Bennett, chief economist at ACY Securities.
“Should the situation begin to look more like economic collapse, gold will be catapulted to surprising levels.”
The dollar index was around its highest level since 2002 touched on Thursday and benchmark 10-year US Treasury yield hit a 11-year peak buoyed by the Fed’s hawkish outlook.
Spot silver fell 0.3% to USD 19.60 per ounce and palladium was down 1% at USD 2,148.01.
Platinum shed 0.7% to USD 894.27 and was down 1.8% for the week, its first weekly decline in three.
This article originally appeared on reuters.com