Gold Treads Water Ahead of a Cascade of Central Bank Hikes. Where to for

Gold Treads Water Ahead of a Cascade of Central Bank Hikes
Gold Treads Water Ahead of a Cascade of Central Bank Hikes
The bullion market is riding a wave of global central bank hikes to combat price pressures, with a 25-basis point rate increase expected from the Fed and a 75-basis point hike by the European Central Bank likely on Thursday. The European Central Bank’s decision is part of a wider effort to tackle the scourge of inflation, and comes as China has retreated from its policy of tightening monetary conditions.

While the ECB’s move was a surprise, it is still likely to be followed by a quarter-point hike in May that would mark the peak for the euro zone’s policy rates. As such, the XAU – the benchmark for the market – could continue to gain in a low-interest environment that should help reduce the opportunity cost of owning bullion.