Gold prices down in early trade

6 Mar 2023 , 09:50 AM

A fresh set of statistics reinforced concerns that central banks around the world will keep hiking rates to limit sticky inflation, and gold prices dipped on Monday as the dollar strengthened.

Spot gold was down 0.1% at $1,853.19 per ounce after reaching its highest level since February 15 on Friday. Futures for U.S. gold increased 0.3% to $1,859.60.

Because the dollar index increased, gold became more expensive for buyers using foreign currencies.

Data released on Friday revealed that the U.S. services sector expanded steadily in February, with new orders and employment reaching more than one-year highs, indicating that the first quarter’s economic growth was sustained.

Mary Daly, president of the San Francisco Federal Reserve, stated on Saturday that if inflation and labour market indicators were coming in hotter than anticipated, interest rates would need to rise and stay there longer than Fed members had anticipated in December.

Thomas Barkin, president of the Richmond Fed, said on Friday that he might see a situation in which the federal reserve drives the benchmark policy interest rate for the United States to a range between 5.5% and 5.75%.

The Fed’s target rate is predicted by the money markets to reach a maximum of 5.442% in September.

According to ECB President Christine Lagarde who talked to Vocento, the euro zone’s underlying inflation rate will remain high for the foreseeable future, making a 50 basis-point interest rate increase later this month increasingly likely.

Spot silver prices down by 0.2% to $21.20 per ounce, platinum prices declined by 0.7% to $970.84, while palladium prices decreased by 0.6% to $1,443.65.

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