Gold edges down on firmer dollar, rate-hike outlook

GOLD prices edged lower on Wednesday (Mar 1) as the dollar ticked up, while investors braced for more US interest rate hikes amid stubbornly high inflation.

Spot gold was down 0.2 per cent at US$1,824.06 per ounce, as of 0047 GMT. US gold futures fell 0.3 per cent to US$1,831.30.

The dollar index rose 0.1 per cent, making bullion more expensive for buyers holding other currencies.

US consumer confidence unexpectedly fell in February, with the decrease concentrated among lower-middle-income households, though Americans grew more upbeat about the labour market, a survey showed on Tuesday.

Money markets expect the US Federal Reserve’s target rate to peak at 5.425 per cent in September, following a string of strong economic data.

The Fed must supplement traditional government data and readings from financial markets with real-time, on-the-ground observations of economic conditions if it is to make good policy, Chicago Fed president Austan Goolsbee said on Tuesday.

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Gold prices set for monthly loss as US rate-hike bets dent appeal

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Surprisingly strong inflation data lifted euro zone bond yields to their highest in more than a decade on Tuesday and pushed expectations for the peak in the European Central Bank’s main interest rate to almost 4 per cent.

High-interest rates dampen gold’s appeal as an inflation hedge while raising the opportunity cost of holding the non-yielding asset.

Spot silver fell 0.3 per cent to US$20.85 per ounce, platinum lost 0.5 per cent to US$947.22 and palladium eased 0.1 per cent to US$1,415.17. REUTERS