Fed Officials' Recession Statement Stalls Gold
The two-day decline in gold came to a halt after some of the US Federal Reserve officials assessed the risk of recession as low despite interest rates.
Gold, the safe haven of investors, followed a flat course after a two-day decline as Federal Reserve (FED) officials predicted that the risk of recession in the US would not be high despite tightening policies.
Spot gold is set to close its third consecutive month of losses due to rising interest rates. Still, concerns that aggressive hikes will lead to an economic slowdown continue to generate demand for the safe asset.
New York Fed President John Williams and San Francisco Fed President Mary Daly acknowledged on Tuesday the need to cool and rein in inflation at a 40-year high, but said a
"soft landing" was still possible.
"We're tapping the brakes to slow down to a more sustainable pace rather than slamming on the brakes so hard that we go into recession," said San Francisco Fed President Mary Daly.
New York Fed President John Williams also stated that increasing the rate hike from 50 basis points to 75 basis points will be discussed at the next meeting, commenting that the 3.5-4 percent interest rate level priced in the markets for 2023 is a "reasonable projection" and noted that a soft landing in the economy is still possible.