Despite traders' uneasiness over higher interest rates, gold maintains gains

Spot gold maintained gains Tuesday as traders questioned the expectation of rising interest rates against the metal’s appeal as a good value. 

Ticker	Security	Last	Change	Change %
GOL	NO DATA AVAILABLE	-	-	-
GC1	NO DATA AVAILABLE	-	-	-

Gold was higher by as much as 0.8% earlier in the day, Bloomberg reported, as higher oil prices fueled inflation fears and a decline in U.S. equities resulted in demand for the metal. 

However, gold pared gains after Fed Chair Jerome Powell said the central bank will take the "necessary steps" to lower inflation even if that means increasing interest rates more rapidly than currently anticipated.

RUSSIA, UKRAINE CRISIS WILL HIT GLOBAL ECONOMY: NABE SURVEY

Gold futures were trading at $1,940, up $5.40 early Tuesday morning.

Rising commodities prices are helping to draw interest to gold’s allure as an inflation hedge, while the war in Ukraine fuels demand for safe assets. Investors have been trying to balance the growing haven appeal of gold against the prospect for rising borrowing costs, which make the precious metal less competitive against assets that offer interest, the report said.

"Inflationary expectations are moving up and the economy may slow down a bit here," said Bart Melek, global head of commodity strategy at TD Securities. "Rates are still accommodative in real terms, so that’s a good environment for gold."

Last week, gold fell 3.4% as the central bank raised interest rates for the first time since 2018. Several officials urged a faster pace of increases to curb the hottest inflation in 40 years, Bloomberg reported.

CLICK HERE TO READ MORE ON FOX BUSINESS

Overall, spot gold rose 0.6% to $1,933.09 an ounce as of 2:10 p.m. in New York. Gold futures for June showed little change on the Comex.