Gold prices dip as dollar firms ahead of US inflation data

GOLD prices eased on Friday (Mar 31) as the dollar edged up ahead of key US inflation data that could influence the Federal Reserve’s monetary policy path.

Spot gold was down 0.1 per cent at US$1,978.39 per ounce, as of 0043 GMT, after rising 1 per cent on Thursday. US gold futures fell 0.1 per cent to US$1,996.50.

The dollar index was 0.1 per cent higher, making bullion less affordable for buyers holding other currencies.

Gold is set to end the quarter and the month higher on expectations that the Fed might consider a rate-hike pause after the collapse of two US regional banks.

The Fed’s preferred inflation measure, the Personal Consumption Expenditures data, due at 1230 GMT is awaited for further clues on the US central bank’s next move.

The opportunity cost of holding non-yielding gold rises when interest rates are increased to bring down inflation.

Three Fed officials kept the door open on Thursday to more rate hikes aimed at lowering high levels of inflation, with two noting banking sector problems could generate enough headwinds on the economy to help cool price pressures faster than expected.

Markets see a 52.2 per cent chance of the Fed standing pat on interest rates in May, according to the CME FedWatch tool.

Data on Thursday showed the number of Americans filing new claims for unemployment benefits rose moderately last week.

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Gold ticks down on firmer dollar, easing banking fears

Spot silver eased 0.1 per cent to US$23.86 per ounce, platinum was up 0.1 per cent at US$986.27 and palladium fell 0.5 per cent to US$1,457.39. REUTERS