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FX.co ★ Gold Surges As Central Banks Combat Inflation With Interest Rate Hikes

Gold Surges As Central Banks Combat Inflation With Interest Rate Hikes

Gold Futures for April settlement oscillated between $1924 and $1948 per troy ounce on Thursday amidst central banks of the U.S and U.K. raising interest rates by quarter percent each to combat the surging inflation. Central banks of Brazil, Hong Kong, UAE, Saudi Arabia, Kuwait, Bahrain, Taiwan, Uzbekistan and Macau also hiked interest rates post the Fed's decision.

Gold Futures are currently trading at $1941.75, up 1.70 percent from the previous close of $1909.20.

Gold prices had touched a high of $2078.80 on March 8 in the aftermath of the Russian invasion of Ukraine and the attack on the nuclear power plant. The prices had corrected substantially and gold price had touched a low of $1895.20 on March 16.

The rise in the prices of gold is despite the interest rate hike widening the opportunity cost of holding the non-interest-bearing yellow metal.

The immediate cue for the prices of gold could be the dynamics of the safe-haven demand that would be influenced to a great extent by the geopolitical situation in Europe.

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