Gold ticks up as dollar eases after Powell’s comments

Gold prices edged higher on Wednesday, as the U.S. dollar eased after Federal Reserve Chair Jerome Powell did not revert to a more hawkish stance despite last week’s stunning jobs report.

FUNDAMENTALS

* Spot gold was up 0.1% at $1,876.14 per ounce, as of 0058 GMT. U.S. gold futures firmed 0.2% to $1,887.90.

* The dollar index was down 0.2%, retreating from a one-month peak hit in the previous session. A weaker dollar makes greenback-priced gold less expensive for buyers holding other currencies.

* Friday’s blockbuster jobs report showed why the battle against inflation will “take quite a bit of time,” Powell said on Tuesday, acknowledging that interest rates might need to move higher than expected.

* Minneapolis Fed President Neel Kashkari said the Fed would probably have to raise interest rates to at least 5.4% in order to tame high inflation.

* Gold is sensitive to high interest rates, which lift the opportunity cost of holding non-yielding bullion. * The U.S. trade deficit widened in December, reversing half of the prior month’s sharp contraction, as imports rebounded and exports of goods dropped to a 10-month low amid cooling global demand and declining crude oil prices.

* Meanwhile, China held 65.12 million fine troy ounces of gold at the end of January, up from 64.64 million ounces at the end of December, central bank data showed.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.32% to 920.82 tonnes on Tuesday from 917.92 tonnes on Monday. [GOL/ETF]

* Spot silver rose 0.4% to $22.27 per ounce, platinum was 0.4% higher at $977.40 and palladium fell 0.2% to $1,642.24.