February 23, 2024

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Gold slips to three-month low as Fed price cues elevate greenback

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Dubai: Gold slipped to a close to three-month low on Thursday because the greenback and Treasury yields superior after the US Federal Reserve signalled extra rate of interest hikes this yr.

Spot gold fell 0.7 per cent to $1,929.99 per ounce by 0710 GMT, hitting its lowest since March 17. US gold futures dropped 1.4 per cent to $1,941.50.

The Fed, in new financial projections, signalled {that a} stronger-than-expected financial system and a slower decline in inflation will lead to a possible rise in borrowing prices by one other half share level by the top of this yr.

“The place gold goes from right here could rely on how lengthy the hawkish remarks from the Fed Chairman proceed to prop up US yields,” Tim Waterer, chief market analyst at KCM Commerce stated.

Merchants at the moment are pricing in a roughly 72 per cent probability of a Fed price hike in July, in keeping with the CME Fedwatch software.

“(The) Fed has kind of given the market a route,” stated Brian Lan, of Singapore supplier GoldSilver Central.

The US greenback index climbed, making bullion dearer for these holding different currencies.

Markets will now sit up for a number of US financial information anticipated later, together with the weekly jobless claims.

“We’re additionally coming into a seasonally gradual interval for bodily demand, suggesting gold costs usually tend to drift decrease in coming periods barring a pointy slowdown in US financial information which may spur curiosity within the gold market,” Commonplace Chartered analyst Suki Cooper stated.

The main target can be on the European Central Financial institution assembly, the place it’s anticipated to lift borrowing prices to their highest degree in 22 years on Thursday and go away the door open to extra hikes, even because the euro zone financial system flags.

Spot silver fell 2.8 per cent to $23.2636 per ounce, platinum dropped 1.2 per cent to $963.72, and palladium misplaced 1.4 per cent to $1,366.44.

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