Gold edges lower as dollar gains on hawkish Fed minutes

Gold prices inched lower on Thursday as the U.S. dollar firmed after minutes of the Federal Reserve‘s March meeting indicated an aggressive stance to combat inflation, denting the safe-haven metal‘s appeal.

FUNDAMENTALS


* Spot gold was down 0.2% at $1,922.08 per ounce by 0125 GMT. U.S. gold futures rose 0.2% to $1,926.10.

* The dollar hovered near a two-year high against a basket of currencies after Fed minutes showed the central bank is preparing to move aggressively to head off inflation.

* A stronger dollar makes gold less attractive for other currency holders.

* “Many” Fed officials said they were prepared to raise rates in half-percentage-point increments in coming policy meetings to try to bring prices under control, even though the rising risks tied to the Ukraine war held them to the standard hike in March, according to the minutes, which were released on Wednesday.

* Minutes from the European Central Bank’s March meeting, due later in the day, are unlikely to include such hawkish plans, though they could offer insight into policymakers’ delicate balancing act to manage soaring inflation and slowing growth.

* The benchmark U.S. 10-year Treasury yield hovered close to multi-year highs hit in the previous session, increasing the opportunity cost of holding non-yielding bullion.

* The Perth Mint’s sales of gold products in March soared 68% to their highest in a year, the refiner said in a blog post on Wednesday, citing an increased appetite for the safe-haven metal following Russia’s invasion of Ukraine.

* Spot silver edged 0.2% lower to $24.38 per ounce, platinum shed 0.1% to $952.32 and palladium was up 0.5% at $2,208.87.

DATA/EVENTS (GMT)


0600 Germany Industrial Output MM Feb

0600 UK Halifax House Prices MM March

1230 US Initial Jobless Claims Weekly