Gold eases as steady dollar, US rate-hike outlook dent appeal

GOLD prices edged lower on Thursday (Feb 9), as the dollar steadied and after US Federal Reserve officials said more interest rate increases were likely to curb inflation.

Spot gold was down 0.1 per cent at US$1,874.58 per ounce, as of 0054 GMT. US gold futures fell 0.2 per cent to US$1,886.20.

The dollar was largely steady against its rivals. A stronger greenback makes dollar-priced gold more expensive for buyers holding other currencies.

Fed officials said on Wednesday more rate hikes are in the cards as the US central bank presses forward with its efforts to cool inflation, although none were ready to suggest that January’s hot jobs report could push them back to a more aggressive monetary policy stance.

Gold is sensitive to high interest rates which lift the opportunity cost of holding non-yielding bullion.

Market participants are now expecting the Fed’s target rate to peak at 5.132 per cent in July, from a current range of 4.5 per cent to 4.75 per cent.

SEE ALSO

Gold ticks up as dollar eases after Powell’s comments

Asean Intelligence

Get insights into businesses across South-east Asia

Get the free report

President Joe Biden said on Wednesday he did not believe the US economy would fall into recession either this year or next year.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.03 per cent to 921.10 tonnes on Wednesday from 920.82 tonnes on Tuesday.

Spot silver fell 0.1 per cent to US$22.28 per ounce, platinum was 0.3 per cent lower at US$966.85 and palladium eased 0.1 per cent to US$1,646.89. REUTERS