Gold prices decline in early trade today

16 Feb 2023 , 08:26 AM

On Thursday, gold prices slightly declined as the dollar strengthened following recent economic statistics that increased expectations that the U.S. Federal Reserve would increase interest rates further to combat inflation.

After reaching a six-week high on Wednesday, the dollar index was up 0.1%, increasing the price of greenback-priced gold for buyers holding other currencies.

According to data released on Wednesday, U.S. retail sales increased by 3% in January after falling for two consecutive months, demonstrating the economy’s ongoing resilience in the face of higher borrowing prices.

According to data released on Tuesday, the U.S. consumer price index rose 0.5% in January over the previous month while rising 6.4% over the previous year.

The Fed’s target rate is currently anticipated by interest rate futures markets to surge over 5.2% in July, up from its current range of 4.50% to 4.75%.

Although gold is regarded as a hedge against rising prices, higher interest rates deter investment in the metal because it pays no interest.

The 10-year Treasury note yield increased to its highest level since January 3.

President of the European Central Bank Christine Lagarde reiterated the bank’s most recent policy guidance on Wednesday, stating that the euro-inflation zone’s rate is still far too high and that the ECB will maintain raising interest rates to reduce underlying price pressures.

Spot silver prices decreased by 0.1% to $21.61 per ounce, while palladium prices remained stable at $1,464.36 and platinum barely changed at $915.16.

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