Please note ThinkMarkets does not provide CFD services to residents of the US.

Please note ThinkMarkets does not provide CFD services to residents of the US.

Learn To Trade
 
Indicators & Chart Patterns

Deepen your knowledge of technical analysis indicators and hone your skills as a trader.

Find your detailed guides here
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn more
Knowledge Base

No matter your experience level, download our free trading guides and develop your skills.

Learn more
Learn To Trade

Trade smarter: boost your skills with our training resources.

Create a live account
Market Analysis
 
Market News

All the latest market news, with regular insights and analysis from our in-house experts

Learn more
Economic Calendar

Make sure you are ahead of every market move with our constantly updated economic calendar.

Learn more
Technical Analysis

Harness past market data to forecast price direction and anticipate market moves.

Learn more
Live Webinars

Boost your knowledge with our live, interactive webinars delivered by industry experts.

Register now
Special Reports

Engaging, in-depth macroeconomic analysis and expert educational content from our in-house analysts

Learn more
Market Analysis

Harness the market intelligence you need to build your trading strategies.

Create a live account
Partnership
 
Affiliate Programme

Grow your business and get rewarded. Find out more about our Affiliate Programme today.

Learn more
Introducing Broker

ThinkMarkets ensures high levels of client satisfaction with high client retention and conversion rates.

Learn more
Proprietary Trading

Partner with us to build your own prop trading business. Enquire with our account managers today.

Learn more
White Label

We supply everything you need to create your own brand in the Forex industry.

Learn more
Regional Representatives

Partner with ThinkMarkets today to access full consulting services, promotional materials and your own budgets.

Learn more
Refer a friend

Receive $50 for you and your friend when you convert them into an active trader of ThinkMarkets.

Learn more
Partnership

Plug into the next-gen platforms and the trades your clients want.

Partner Portal
About ThinkMarkets
 
Sponsorships

Check out our sponsorships with global institutions and athletes, built on shared values of excellence.

Learn more
About Us

Find out more about ThinkMarkets, an established, multi-award winning global broker you can trust.

Learn more
Careers

Discover a range of rewarding career possibilities across the globe

Apply now
ThinkMarkets News

Keep up to date with our latest company news and announcements

Learn more
Trading Infrastructure

When it comes to the speed we execute your trades, no expense is spared. Find out more.

Learn more
Contact Us

Our multilingual support team is here for you 24/7.

Learn more
About ThinkMarkets

Global presence, local expertise - find out what sets us apart.

Create a live account
Log in Create account

Gold heads for weekly drop as central banks signal more rate hikes are to come to fight inflation

Agnes Lovasz Agnes Lovasz 16/12/2022
Gold heads for weekly drop as central banks signal more rate hikes are to come to fight inflation Gold heads for weekly drop as central banks signal more rate hikes are to come to fight inflation
Gold heads for weekly drop as central banks signal more rate hikes are to come to fight inflation Agnes Lovasz

Gold was on track for its biggest weekly drop since mid-November after major central banks indicated that they had a lot more work to do to curb inflation and rate increases were set to continue.

 

The US Federal Reserve, the European Central Bank and the Bank of England all raised their benchmark interest rates by 50 basis points this week. While for the Fed, this step meant a slowdown in the pace of rate increases after four, 75 basis-point mega hikes in the previous four meetings.

 

US policymakers also warned that US interest rates are likely to peak at higher levels than expected by economists and traders. Higher rates diminish gold’s appeal, which pays no interest, compared to interest-bearing instruments, such as the US dollar and US Treasury notes.

 

The Fed’s interest rate target range is now between 4.25% and 4.50%, compared with nearly zero at the beginning of the year. Fed officials expect the current rate-increase campaign to peak at 5.1% according to the 'dot plot,' a chart of individual member's expectations. 

 

“We have covered a lot of ground, and the full effects of our rapid tightening so far are yet to be felt,” Fed Chair Jerome Powell said at a 14 December press conference following the rate decision. “Even so, we have more work to do.”

 

He added  that the October and November inflation data showed “a welcome reduction” in the monthly pace of price increases, “but it will take substantially more evidence to give confidence that inflation is on a sustained downward path.”

 

Elsewhere, European Central Bank President Christine Lagarde said that “significant” further rate rises at a “steady pace” were still to follow, after the ECB lifted its key rate to a 14-year high of 2% from 1.5% on 15 December. Similarly, the Bank of England carried out its ninth consecutive rate increase on the same day, taking the key UK interest rate to 3.5% from 3%. 

 

A major factor for the gold price, the US dollar, jumped 0.9% on Thursday, 15 December, based on the dollar index (DXY), which tracks the value of the greenback against six of its major counterparts. This spike was caused by fears among investors that the rate increases will trigger deeper recessions in the world’s major economies than expected.

 

Overall, the US currency saw little change on the week. The gold price and the US dollar tend to move inversely, because a weaker US currency makes gold contracts, which are priced in US dollars, cheaper in other currencies. 

 

What’s your view on the outlook for gold as we head into 2023? Trade gold with CFDs in any direction, long or short, on our award-winning ThinkTrader platform.

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

Related articles:

OpenAI upheaval triggers new all-time high in...

By Alejandro Zambrano

21/11/2023

Navigating the Gold Market: How the upcoming ...

By Alejandro Zambrano

12/09/2023

Wake me up when September ends...Could season...

By Carl Capolingua

01/09/2023

The Bull is back, depending on these three co...

By Carl Capolingua

31/08/2023

Investors hold their breath ahead of US data ...

By Carl Capolingua

29/08/2023

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Back to top