Business Standard

Gold prices ease on rate-hike pressure, softer dollar checks losses

Spot gold had fallen 0.2% to $1,734.69 per ounce by 0857 GMT after hitting a one-month low of $1,719.56 in the previous session


Photo: Bloomberg

Gold prices edged lower on Tuesday, weighed down by expectations of more interest rate hikes by the U.S. Federal Reserve, while a slightly softer dollar lent some support to the metal.
Spot gold had fallen 0.2% to $1,734.69 per ounce by 0857 GMT after hitting a one-month low of $1,719.56 in the previous session. U.S. gold futures were also down 0.2% at $1,746.50.
"Any gain in gold is likely to be muted as (Fed chief) Jerome Powell's comments highlighted that plenty of intervention is still required to bring inflation under control," said Rupert Rowling, a market analyst at Kinesis Money.
At the Jackson Hole central banking conference in Wyoming last week, the Fed and the European Central Bank struck a hawkish tone, pledging all efforts to tame stubbornly high inflation even if economic growth takes a hit.
"Powell's speech appears to have hit home finally, which could make any significant upside in gold very challenging. We're seeing weakness in gold around $1,730, a break of which will draw focus to $1,680-$1,700," said Craig Erlam, a senior market analyst at OANDA.
Although gold is considered a safe bet during economic uncertainty, interest rate hikes increase the opportunity cost of holding bullion.
On the data front, investors will be scanning the U.S. Consumer Confidence report due later in the day.
If the numbers continue to underline the trend that the economy remains healthy despite high inflation, then gold may get a slight boost, Kinesis Money's Rowling added.
The dollar index eased on the day from a two-decade peak, limiting losses in greenback-priced bullion. [USD/]
Spot silver rose 0.1% to $18.76 per ounce, while platinum was little changed at $863.85. Palladium eased 0.2% to $2,143.04.
(Reporting by Arundhati Sarkar and Eileen Soreng in Bengaluru; Editing by Subhranshu Sahu)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Aug 30 2022 | 3:27 PM IST

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