Gold falls in early trade

17 Apr 2023 , 08:31 AM

A stronger US dollar and the likelihood of another rate increase by the Federal Reserve following last week’s mixed economic data caused gold prices to nudge lower on Monday.

Spot gold was down 0.2% at $1,999.12 per ounce. Gold futures in the US decreased 0.3% to $2,009.00.

The dollar index increased by 0.2%, increasing the price of bullion for customers using other currencies.

According to data issued on Friday, U.S. core retail sales, which most closely reflect the consumer spending component of the GDP, fell 0.3% last month, but the increases in January and February strongly suggest that consumer spending will pick up in the first quarter.

Consumer confidence in the US grew somewhat in April, although households anticipated rising inflation over the following 12 months. A different survey revealed that production at American factories decreased more than anticipated in March but managed to increase somewhat in the first three months.

Despite a year of strong rate increases, U.S. central bankers ‘haven’t made much progress’ in getting inflation back to their 2% objective, and need to raise rates even more, Fed Governor Christopher Waller said on Friday.

According to the CME FedWatch tool, the probability of a 25 basis-point rise in May is at 80.8%.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, reported that its holdings decreased by 0.31% on Friday to 927.72 tonnes from 930.61 tonnes on Thursday.

Spot silver prices decreased by 0.6% to $25.22 per ounce, while platinum prices dropped by 0.8% to $1,036.26 and palladium prices down by 1.1% to $1,487.08.

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