Gold holds above $1,750 per ounce

Gold is on the verge of a three-month high, as reported on Tuesday. This is due to the mixed messages from Federal Reserve (Fed) officials on U.S. interest rate hikes, putting pressure on the dollar. 

This week, Lael Brainard and Christopher Waller, members of the Fed's Board of Governors, said that the U.S. central bank is planning to continue raising interest rates. However, the pace of rate hikes is expected to be slower. Regulator’s representatives also outlined that the cycle of monetary tightening is far from being over. Investing.com reported further rate hikes are necessary given soaring inflation. 

In case of slower rate rises, it is likely that the price of gold and some other metals may surge in the short term. In regards to accelerating monetary tightening, gold's appeal could decline in the long run. 

The market expects the Fed to raise rates by 50 basis points at its meeting in December. Chances are over 80%. But these measures may lead to the highest level of interest rates since the financial crisis of 2008.

Rate hikes in the U.S. have had a direct impact on the metals markets over 2022. Thus, rising Treasury yields have increased an alternative cost of holding non-performing assets.