Gold flat after sharp declines on US data
GOLD prices were little changed in early Asian trade on Tuesday (Dec 6), after falling more than 1.5 per cent in the previous session as the US dollar rebounded on bets that strong economic data may prompt bigger interest rate hikes by the Federal Reserve.
Spot gold was flat at US$1,768.61 per ounce, as of 0011 GMT. Bullion hit a five-month high on Monday before closing 1.6 per cent lower in its biggest daily drop since Sep 23.
US gold futures were little changed at US$1,780.90.
The dollar index rebounded on Monday after data showed US services industry activity unexpectedly picked up in November, prompting speculation the Fed may lift interest rates more than recently projected.
Higher interest rates tend to weigh on gold’s appeal as they increase the opportunity cost of holding the non-yielding metal.
Meanwhile, the European Central Bank is likely to raise interest rates by 50 basis points next week, governing council member Gabriel Makhlouf said on Monday.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.2 per cent to 903.46 tonnes on Monday.
Top bullion consumer China is set to announce a further easing of some of the world’s toughest Covid curbs as early as Wednesday, sources said, as investors cheered the prospect of a policy shift that follows widespread protests and mounting economic damage.
Spot silver inched 0.1 per cent lower to US$22.23, platinum was flat at US$997.84 and palladium rose 0.2 per cent to US$1,878.93. REUTERS
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