Gold edges down on firmer dollar, rate-hike outlook

Gold prices edged lower on Wednesday as the dollar ticked up, while investors braced for more U.S. interest rate hikes amid stubbornly high inflation.

FUNDAMENTALS

* Spot gold was down 0.2% at $1,824.06 per ounce, as of 0047 GMT. U.S. gold futures fell 0.3% to $1,831.30.

* The dollar index rose 0.1%, making bullion more expensive for buyers holding other currencies.

* U.S. consumer confidence unexpectedly fell in February, with the decrease concentrated among lower-middle-income households, though Americans grew more upbeat about the labour market, a survey showed on Tuesday.

* Money markets expect the U.S. Federal Reserve’s target rate to peak at 5.425% in September, following a string of strong economic data.

* The Fed must supplement traditional government data and readings from financial markets with real-time, on-the-ground observations of economic conditions if it is to make good policy, Chicago Fed President Austan Goolsbee said on Tuesday. * Surprisingly strong inflation data lifted euro zone bond yields to their highest in more than a decade on Tuesday, and pushed expectations for the peak in the European Central Bank’s main interest rate to almost 4%.

* High interest rates dampen gold’s appeal as an inflation hedge while raising the opportunity cost of holding the non-yielding asset.

* Spot silver fell 0.3% to $20.85 per ounce, platinum lost 0.5% to $947.22 and palladium eased 0.1% to $1,415.17.