Gold inches lower as dollar firms and Fed rate hikes slow
Spot gold dipped 0.3% to $1,902.79 per ounce as the dollar index rose 0.3%, while market focus shifts to economic data and potential slowing of inflation
18 January 2023 - 07:17
byAshitha Shivaprasad
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Bengaluru — Gold prices inched lower on Wednesday as the US dollar firmed, while expectations of a slowdown in the pace of Federal Reserve interest rate hikes limited the losses.
Spot gold dipped 0.3% to $1,902.79 per ounce at 2.56am GMT. US gold futures fell 0.2% to $1,906.00.
The dollar index was up 0.3%. A stronger dollar tends to make gold more expensive for buyers holding other currencies.
“Gold is going to bounce around the $1,900 level in the near term. I don’t think we are going to see any big moves and it will be stuck in a neutral zone,” said Edward Meir, a metals analyst at Marex.
“Market focus is going to be on economic data. If the narrative continues to be that inflation is cooling and interest rates will come down, then it will be bullish for gold.”
Investors will keep an eye out for the US producer price index (PPI) and retail sales data due later in the day.
The US central bank raised rates by 75 basis points (bps) four times last year, before slowing to a 50 bps increase in December. Traders are mostly pricing in a 25 bps hike at the Fed’s next policy meeting.
Lower interest rates tend to be beneficial for bullion, decreasing the opportunity cost of holding the non-yielding asset.
The stopping point for Fed rate increases will depend on the path of inflation, Richmond Federal Reserve Bank President Tom Barkin said on Tuesday.
On the physical front, Canadian miner Barrick Gold Corp reported on Tuesday a 13.4% sequential rise in gold production in what could be its highest quarterly output last year.
Spot silver fell 0.1% to $23.90 per ounce, platinum lost 0.6% to $1,033.06 and palladium dropped 0.2% to $1,740.30.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold inches lower as dollar firms and Fed rate hikes slow
Spot gold dipped 0.3% to $1,902.79 per ounce as the dollar index rose 0.3%, while market focus shifts to economic data and potential slowing of inflation
Bengaluru — Gold prices inched lower on Wednesday as the US dollar firmed, while expectations of a slowdown in the pace of Federal Reserve interest rate hikes limited the losses.
Spot gold dipped 0.3% to $1,902.79 per ounce at 2.56am GMT. US gold futures fell 0.2% to $1,906.00.
The dollar index was up 0.3%. A stronger dollar tends to make gold more expensive for buyers holding other currencies.
“Gold is going to bounce around the $1,900 level in the near term. I don’t think we are going to see any big moves and it will be stuck in a neutral zone,” said Edward Meir, a metals analyst at Marex.
“Market focus is going to be on economic data. If the narrative continues to be that inflation is cooling and interest rates will come down, then it will be bullish for gold.”
Investors will keep an eye out for the US producer price index (PPI) and retail sales data due later in the day.
The US central bank raised rates by 75 basis points (bps) four times last year, before slowing to a 50 bps increase in December. Traders are mostly pricing in a 25 bps hike at the Fed’s next policy meeting.
Lower interest rates tend to be beneficial for bullion, decreasing the opportunity cost of holding the non-yielding asset.
The stopping point for Fed rate increases will depend on the path of inflation, Richmond Federal Reserve Bank President Tom Barkin said on Tuesday.
On the physical front, Canadian miner Barrick Gold Corp reported on Tuesday a 13.4% sequential rise in gold production in what could be its highest quarterly output last year.
Spot silver fell 0.1% to $23.90 per ounce, platinum lost 0.6% to $1,033.06 and palladium dropped 0.2% to $1,740.30.
Reuters
Gold falls as dollar firms
Gold scales near nine-month peak on bullish sentiment over Fed rate hikes
Gold edges higher on hopes of smaller US rate hikes
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