Gold edges lower as banking relief, steady dollar dampen demand
GOLD prices edged down on Wednesday (Mar 29) as the US dollar steadied, while fears abated about a bigger fallout from the global banking sector crisis after efforts by regulators to shore up investor confidence.
Spot gold was trading 0.2 per cent lower at US$1,970.79 per ounce, as of 0050 GMT, after rising 1 per cent on Tuesday. US gold futures eased 0.1 per cent to US$1,972.30.
The dollar index was 0.1 per cent higher, making bullion more expensive for buyers holding other currencies.
The recent failures of mid-size US lenders show the need for more robust risk management at banks and fintechs, along with improved regulation, the head of the top consumer financial watchdog agency said on Tuesday.
As stress in the banking sector appears to subside, markets are now pricing in a 48 per cent chance of the US Federal Reserve raising interest rates by 25 basis points in May, according to the CME FedWatch tool.
Bullion is seen as a hedge against inflation, but the opportunity cost of holding non-yielding gold rises when interest rates are increased to bring down inflation.
US consumer confidence unexpectedly increased in March, but Americans are becoming a bit anxious about the labour market, a survey showed on Tuesday.
The US trade deficit in goods widened modestly by 0.6 per cent to US$91.6 billion in February as exports declined, potentially setting up trade to be a small drag on economic growth in the first quarter.
Spot silver rose 0.3 per cent to US$23.33 per ounce, while platinum was flat at US$962.96 and palladium was also listless at US$1,419.39. REUTERS
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