Gold pricres decline in early trade

17 Feb 2023 , 08:33 AM

A stronger dollar and concerns about additional interest rate increases by the U.S. Federal Reserve caused gold prices to decline on Friday, setting the stage for a weeklong decline.

Spot gold was down 0.3% at $1,832.42 per ounce. This week, the price of gold dropped by 1.7%. Futures for U.S. gold decreased 0.6% to $1,841.00.

Dollar index increased by 0.1%. Being a safe store of wealth, gold competes with the dollar, and increases in the value of the dollar make gold bullion less appealing to buyers from abroad.

Two Fed officials warned on Thursday that further increases in borrowing costs are necessary to bring inflation back down to the targeted levels and that the U.S. central bank likely should have raised interest rates more than it did earlier this month.

The money markets now anticipate benchmark rates to increase over 5% by May and remain there throughout the year.

The number of People submitting new claims for unemployment benefits surprisingly decreased last week, according to data released on Thursday.

According to Labor Department data, producer prices increased monthly in January. After falling by 0.2% in December, the producer price index for final demand increased by 0.7% last month.

Since late December, the 10-year Treasury note yield has increased to its highest point.

Spot silver dropped by 0.6% to $21.48 an ounce, platinum down by 0.4% to $916.66, and palladium dropped by 0.6% to $1,501.09.

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