Gold slips as US dollar, bond yields firm after Fed official comment

GOLD prices eased on Thursday (Mar 28) as the US dollar and bond yields ticked higher after comments from a Federal Reserve official on interest rate cuts, while investors looked forward to more economic data for policy clues.

Spot gold was down 0.2 per cent at US$2,189.29 per ounce, as at 0139 GMT.

US gold futures edged 0.1 per cent lower to US$2,188.30 per ounce.

Fed governor Christopher Waller said on Wednesday recent disappointing inflation data affirms the case for the US central bank holding off on cutting its short-term interest rate target.

The US dollar was up 0.1 per cent against its rivals, making gold more expensive for other currency holder, while yields on 10-year Treasury notes also rose.

Investors now look forward to the US core personal consumption expenditure (PCE) price index report due on Friday to gauge when the Fed may begin cutting interest rates.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The PCE price index was seen rising 0.3 per cent in February, which would keep the annual pace at 2.8 per cent. Also on investor radar is the weekly US initial jobless claims report due later in day.

Traders are pricing in a 62 per cent probability that the Fed will begin cutting rates in June, down from a 70 per cent chance seen on Wednesday, according to the CME Group’s FedWatch Tool. Lower interest rates reduce the opportunity cost of holding bullion.

India’s gold imports are set to plunge by more than 90 per cent in March from the previous month to hit the lowest level since the Covid pandemic, as banks cut imports after record-high prices hit demand.

Spot silver slipped 0.4 per cent to US$24.56 per ounce, platinum rose 0.4 per cent to US$897.10 and palladium gained 0.4 per cent to US$987.66. REUTERS