Gold prices ease as US dollar regains some ground

GOLD prices edged lower on Tuesday (Apr 4) as a steady dollar made bullion more expensive for overseas buyers, while softer US economic data heightened expectations of less-aggressive moves by the Federal Reserve.

Spot gold was down 0.1 per cent at US$1,962.36 per ounce, as of 0103 GMT. US gold futures were flat at US$1,999.50.

The dollar index was 0.1 per cent higher.

Gold prices had dropped on Monday after a surprise cut in Opec+ crude production was announced during the weekend. But prices reversed course to rally 1 per cent as the dollar stumbled following the release of softer US economic data.

Data showed US manufacturing activity slumped to the lowest level in nearly three years in March as new orders continued to contract, and activity could decline further amid tightening credit conditions.

US Treasury Secretary Janet Yellen said a surprise Opec+ oil production cut is an “unconstructive act” that will add uncertainty to the global growth outlook.

While gold is traditionally considered a hedge against inflation, higher interest rates to rein in rising price pressures dim the appeal for non-yielding bullion.

Markets see a 54.8 per cent chance of the Fed hiking rates by a quarter point in May, according to the CME FedWatch tool.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.22 per cent to 930.04 tonnes on Monday from 928.02 tonnes on Friday.

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Gold dips as stronger dollar dampens appeal

Spot silver fell 0.3 per cent to US$23.92 per ounce, while platinum edged up 0.2 per cent to US$987.92 and palladium rose 0.2 per cent to US$1,462.09. REUTERS