Gold prices edged higher on a weaker dollar, although bullion hovered close to three-month lows as traders assessed prospects that more interest rate hikes by the US Federal Reserve were in the offing.
Spot gold XAU= rose 0.2% to $1,925.78 per ounce by 0341 GMT.
US gold futures were up 0.3% at $1,935.50.
Bullion slumped nearly 2% in the previous week as hawkish comments from Fed officials suggested more rate hikes to bring down sticky inflation. Higher interest rates make non-yielding gold less appealing.
“We are near the end of tightening cycle, but still not quite at the end as there is still the risk of it being extended, hence the depressed price action,” said OCBC FX strategist Christopher Wong.
San Francisco Fed Bank President Mary Daly said on Friday two more rate hikes this year are a “very reasonable” projection. Investors now expect a 72% chance of a rate hike in July, with rate cuts seen from 2024 onwards, per CME’s Fedwatch tool.
Gold on track for worst week since Feb on hawkish Fed
The dollar index edged 0.2% lower, making bullion more attractive for overseas investors.
In the wider market, oil was slightly higher as an abortive weekend mutiny by Russian mercenaries raised questions about crude supply, while stocks lacked direction as investors waited for more clarity around the situation.
Gold, traditionally a safe-haven investment, was not seeing much movement based on the geopolitical developments, yet the situation remains fluid, Wong highlighted.
S&P Global became the first major international credit agency to cut its forecasts for China’s economy this year after several major banks, reducing it to 5.2% from 5.5%.
Spot silver XAG= rose 1.4% to $22.74 per ounce, platinum jumped 1.2% to $928.30 while palladium climbed nearly 1% to $1,296.01.
Comments
Comments are closed for this article.