Gold muted as higher-for-longer rate outlook weighs
GLD•Other precious metals
Spot silver XAG= fell 0.1% to $65.99, platinum XPT= lost 0.6% to $1,786.43 and palladium XPD= declined 0.4% to $1,296.40.
Gold struggles for momentum as rate outlook weighs
Sept. 22 (Reuters) - Gold struggled for momentum on Tuesday as expectations of interest rates staying higher for longer weighed on sentiment, with investors awaiting comments from U.S. Federal Reserve officials for policy clues.
Spot gold XAU= was little changed at $4,342.41 per ounce by 0454 GMT. U.S. gold futures GCcv1 fell 0.1% to $4,379.30.
Bullion is traditionally viewed as a hedge against inflation and geopolitical risks, but its appeal tends to wane in a high-interest-rate environment as investors favor yield-bearing assets.
Fed comments, crude prices and geopolitics in focus
With U.S. economic data limited this week, investors will focus on comments from Fed officials for signs of whether the central bank is leaning toward another rate increase in October, as well as on crude oil prices, said Chris Weston, head of research at Pepperstone.
"While crude has come modestly off its recent highs, a reversal higher that builds inflation expectations would only intensify the rates story, and gold would likely continue to face headwinds," said Weston.
The Fed raised its policy rate by a quarter of a percentage point last week and flagged more hikes in the coming months.
The U.S. central bank will likely need to hike rates further to lower inflation resulting from strong demand as well as a commodity price shock that has moved beyond oil, St. Louis Fed President Alberto Musalem said, adding that it would be better for the Fed to act sooner than wait.
