Gold inches lower on expectations of more rate hikes
GOLD prices eased in early Asian hours on Monday (Dec 19), as the market expected more interest rate hikes in the next year by the US Federal Reserve.
Spot gold was down 0.1 per cent at US$1,791.25 per ounce as of 0010 GMT. US gold futures were little changed at US$1,800.70.
Fed policymakers may need to lift US borrowing costs above the peak 5.1 per cent they pencilled in just this week, and keep them there perhaps into 2024 to squeeze high inflation out of the economy, three of them signalled on Friday.
Higher interest rates tend to weigh on the bullion’s appeal, as it increases the opportunity cost of holding the non-yielding asset.
The dollar index was up 0.1 per cent. A stronger greenback makes gold more expensive for overseas buyers.
Indian gold dealers offered bigger discounts to attract consumers who delayed purchases due to a spike in prices last week, while China’s reopening plans have kept premiums firm in the world’s top bullion buyer.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.4 per cent to 910.40 tonnes on Friday.
Spot silver fell 0.3 per cent to US$23.14, platinum rose 0.3 per cent to US$994.53 and palladium was up 1.1 per cent to US$1,732.59. REUTERS
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