Gold prices slumped on Friday, on track for biggest weekly drop since June 2021 as the dollar scaled a 20-year peak.
The dollar hit its highest since late 2002, making bullion more expensive for buyers holding other currencies.
The Federal Reserve’s sharp interest rate hike in June has raised worries of the hokes tipping the U.S. economy into a recession. Federal Reserve Chair Jerome Powell said acknowledged the possibility of one in his testimony before the Senate Banking Committee
Two Federal Reserve policymakers said they support another sharp interest rate hike in July and perhaps September as well.
“I am definitely in support a doing another 75 basis-point hike in July,” Fed Governor Christopher Waller said during a discussion with the National Association for Business Economics.
“Probably 50 in September,” Waller added, “and then after that we can debate whether to go back down to 25s or if inflation just doesn’t seem to be going down, we have to do more.”
Oil drops as demand concerns weigh
Oil slipped in choppy trade on Friday and was headed towards a weekly decline as worries of a hit to fuel demand induced by the pandemic offset tight supply in the market.
Central banks across the world are hiking interest rates across the world to rein in soaring inflation. This has sparked worries of an adverse impact on the economy.
A surge in coronavirus cases in China’s Shanghai has spurred fears of a slump in fuel demand from the country even as the government doubled down on its restrictions.
