Gold prices firm as dollar eases; set for weekly gain

GOLD prices rose on Friday (Mar 3), on track for their first weekly gain in five, as the dollar eased, even though fears persisted that the US Federal Reserve would keep raising interest rates to curb inflationary pressures.

Spot gold was up 0.3 per cent at US$1,840.89 per ounce, as of 0119 GMT. US gold futures rose 0.4 per cent to US$1,846.70.

Bullion was up about 1.6 per cent for the week so far.

The dollar index eased 0.1 per cent, making bullion more affordable for buyers holding other currencies.

The number of Americans filing new claims for unemployment benefits fell again last week, pointing to sustained labour market strength and adding to fears that the Fed would keep hiking interest rates for longer.

Another report from the US Labor Department on Thursday showed labour costs grew much faster than previously estimated in the fourth quarter.

Atlanta Fed president Raphael Bostic said he was ready to keep lifting rates higher if inflation did not slow, and was still mulling how recent, stronger-than-anticipated inflation data might shape the Fed policy.

Money markets expect the Fed’s target rate to peak at 5.457 per cent in September.

Eurozone inflation fell less than expected last month and underlying price growth surged, reinforcing the case for the European Central Bank to keep raising interest rates at a brisk pace, data from Eurostat showed.

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Gold flat as investors assess interest rate outlook

Elevated interest rates dull gold’s appeal as an inflation hedge while raising the opportunity cost of holding the non-yielding asset.

Spot silver gained 0.8 per cent to US$21.04 per ounce, platinum rose 0.4 per cent to US$964.10 and palladium was up 0.4 per cent at US$1,454.08. REUTERS