Gold falls to over one-week low on firm dollar, Fed rate hike bets
GLD•Spot gold fell 0.2% to $3,977.99 an ounce after reaching its lowest level since November 4, as stronger US inflation data and hawkish Fed remarks lifted the dollar and rate-hike expectations. US gold futures fell 0.4% to $3,983.20.
1. Dollar and rate bets weigh
Gold touched a more than one-week low on Thursday after stronger-than-expected US inflation data and hawkish remarks from Federal Reserve officials boosted the dollar and cemented expectations of an interest-rate hike next month. The dollar climbed to a 19-month high against major peers, making dollar-priced bullion more expensive for holders of other currencies.
2. Investors await US data
Traders are pricing in a rate hike next month and another in March, while market participants await the US Producer Price Index report due Friday. OCBC analysts said the near-term outlook carries two-way risks but that they were not turning bearish on gold’s medium-term prospects. Spot palladium rose 0.5% to $1,032.63 an ounce.
