Gold drifts higher on softer dollar, eyes on US data

GOLD prices edged up on Friday (Feb 24) as the US dollar softened, while traders awaited economic data due later in the day to gauge the Federal Reserve’s rate-hike stance.

Spot gold was up 0.1 per cent at US$1,824.88 per ounce, as of 0049 GMT, after hitting a two-month low in the previous session. US gold futures rose 0.3 per cent to US$1,831.40.

For the week so far, bullion is down 0.9 per cent.

The dollar index eased off a seven-week high hit on Thursday, making bullion less expensive for buyers holding other currencies.

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, continuing to signal persistently tight labour market conditions.

Meanwhile, data on Thursday showed fourth-quarter gross domestic product growth estimate being trimmed to a 2.7 per cent annualised rate from the previously reported 2.9 per cent pace.

A separate report on Thursday showed the fourth-quarter personal consumption expenditures (PCE) price index accelerated at a 3.7 per cent pace, revised up from the previously estimated 3.2 per cent pace. The upgrades point to higher January PCE price index readings, due at 1330 GMT.

Traders of Fed funds futures expect benchmark rates to peak at 5.343 per cent in July and remain above 5 per cent through the year.

Bullion is seen as a hedge against inflation, but rising interest rates dull the non-yielding asset’s appeal.

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Spot silver rose 0.2 per cent to US$21.34 per ounce, platinum eased 0.1 per cent to US$945.94 and palladium edged 0.1 per cent lower to US$1,447.60. REUTERS