Gold prices flat as firmer dollar, yields dim safe-haven demand
By Asha Sistla
(Reuters) – Gold costs have been flat on Wednesday as hawkish feedback from U.S. Federal Reserve officers bolstered the greenback and Treasury yields to multi-year highs, denting bullion’s safe-haven demand and offsetting assist from uncertainty across the Ukraine battle.
Spot gold was flat at $1,922.59 per ounce, as of 0320 GMT, after declining 0.4% earlier within the session. U.S. gold futures have been down 0.1% to $1,926.20.
“Merchants stay closely net-long on gold futures markets, and that is clearly serving to to assist costs total,” mentioned Metropolis Index senior market analyst Matt Simpson.
“But, the stronger U.S. greenback and lack of safe-haven demand are capping its upside potential.”
The greenback scaled its highest in almost two years as Fed officers pushed for a fast discount within the central financial institution’s bloated stability sheet, with one in all them expressing openness to hefty fee will increase of half a share level. [USD/]
A stronger greenback makes gold much less engaging for different foreign money holders.
“Hawkish feedback from key Fed members yesterday doubtless overshadow immediately’s FOMC (Federal Open Market Committee) minutes, as they level in the direction of a 50 bp hike on the subsequent FOMC assembly and a quicker stability sheet discount than anticipated,” Simpson mentioned.
The Fed will launch on Wednesday minutes of its March assembly that might present particulars on its plans to scale back its bond holdings.
U.S. Treasury yields hit multi-year highs, with longer-term yields shifting extra shortly and partly reversing a number of the current inversions within the U.S. curve. [US/]
Gold is very delicate to rising U.S. rates of interest and better yields, which enhance the chance value of holding non-yielding bullion, whereas boosting the greenback, through which it’s priced.
In the meantime, the USA and its allies have been set on Wednesday to impose new sanctions on Moscow over civilian killings in northern Ukraine.
Spot silver was flat at $24.32 per ounce, platinum shed 0.3% to $965.11 and palladium was down 0.1% at $2,235.92.
(Reporting by Asha Sistla in Bengaluru; Enhancing by Sherry Jacob-Phillips)
