Gold fell due to weak strong dollar; Focus on Fed Minutes

Gold prices fell on Wednesday in choppy trading as a strong dollar and the prospect of a Federal Reserve interest rate hike kept non-yielding bullion near a one-week low.

Spot XAU Gold = down 0.1% to $1,921.60 an ounce by 8AM ET (1200 GMT). US GCv1 gold futures were down 0.2% at $1,924.40.

Gold touched its lowest level since March 29, a move that came a day after Fed Governor Lael Brainard’s comments reinforced expectations of tough measures by the US central bank to tame inflation. (Full Story)

Brainard’s comments pushed the US dollar and Treasury yields to multi-year highs, reducing gold’s allure. US dollar / US dollar /

The Federal Reserve is due to release the FOMC meeting minutes on March 15-16 at 2 PM ET (1800 GMT).

“Gold could fall back below $1,900 if the FOMC meeting minutes or Fed speech in the coming days provide more hawkish evidence,” said Han Tan, senior market analyst at Exinity.

Higher US interest rates and higher yields increase the opportunity cost of holding bullion, which is also used as a hedge against rising inflation.

“However, further sanctions against Russia that are adding to inflationary pressures and further bleakening the global economic outlook should provide notable support to spot gold,” Tan added.

Global stock prices plunged as the United States and its allies prepared new sanctions on Moscow over the killings of civilians described by Ukraine as “war crimes”, while Russian artillery bombed the Ukrainian cities of Mariupol and Kharkiv. (Full story) MKTS / GLOB

“There are still a number of things that could trigger another rally in gold. Inflation continues to rise beyond current expectations, talks between Ukraine and Russia collapse or a recession occurs,” said Craig Erlam, chief market analyst at OANDA.

Among other precious metals, spot silver XAG= fell 0.7% to $24.15 an ounce, platinum XPT fell 0.3% to $965.20, and palladium XPD rose 0.4% to $2247.53.

(Reporting by Elaine Suring in Bengaluru; Editing by Amy Karen Daniel and Paul Simao)

(The title and image for this report may have been reformulated only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)

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