Precious: Precious metals rally as U.S. dollar extends losses

Platinum Metals

20/12/2022 16:26

* 
      Silver jumps 4.5%
    

        * 
      Platinum, palladium rally
    

  
 (Recasts, adds comments, updates prices)
    By Seher Dareen
       Dec 20 (Reuters) - Gold prices climbed more than 1% to
their highest levels in a week on Tuesday and other precious
metals also rallied on the back of a sliding dollar, as markets
remained focused on the Federal Reserve's interest rate
strategy.
    Spot gold  XAU=  was up 1.5% to $1,814.68 per ounce by 1549
GMT. U.S. gold futures  GCv1  rose 1.7% to $1,828.30.
    The yen surged to a four-month peak against the dollar after
the Bank of Japan stunned markets by deciding to review its
yield-curve control policy.  USD/ 
    The new U.S. spending bill is putting more pressure on the
dollar, with gold prices rallying based on more liquidity being
injected into the system, said Jeffrey Sica, chief executive
officer of Circle Squared Alternative Investments.
    The U.S. Congress was moving forward with a $1.66 trillion
government funding bill, scrambling to pass a measure.
    "I see that it's going to be a dark shadow on the gold
market, but I still think we're headed for an upside based on
all the chaos," Sica added, referring to the prospect of the Fed
continuing to raise rates. 
    Fed Chair Jerome Powell last week said the U.S. central bank
will deliver more rate hikes next year even as the economy slips
towards a possible recession. 
    Bullion has shed more than $260 an ounce since its March
peak as central banks stepped up efforts to fight soaring
inflation, but it is enjoying its best quarter since early 2020,
up 9.3% so far.  
    Higher interest rates increase the opportunity cost of
holding bullion that pays no interest.
    Meanwhile, China was grappling with surging COVID-19 cases,
and the World Bank cut its growth outlook for this year and the
next for the top consumer of bullion.
    Elsewhere, spot silver  XAG=  rose 4.5% to $23.98 per ounce,
posting its biggest intraday gain since early November.
    Platinum  XPT=  rose 3.2% to $1,011.17 while palladium
 XPD=  was up 2.88 % to $1,717.38.
 (Reporting by Seher Dareen in Bengaluru; Editing by Paul Simao)
 ((Seher.Dareen@thomsonreuters.com; If within U.S. +1 646 223
8780;))