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Commerzbank sees $1,850/oz gold by mid-year, $1,950 by end-2023
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Palladium rises 3%
(Updates details, prices)
By Seher Dareen and Bharat Gautam
Feb 7 (Reuters) - Gold eked out gains on Tuesday,
tracking a slight pullback in the dollar and as investors
digested comments from U.S. Federal Reserve Chair Jerome Powell
on the outlook for rate-hike policy.
Spot gold rose 0.2% to $1,870.49 per ounce by 2:02
p.m. ET (1902 GMT). U.S. gold futures settled up 0.3% at
$1,884.80.
Powell said on Tuesday the latest U.S. employment report
showed the process for getting inflation back near the central
bank's 2% target will take "quite a bit of time", noting further
interest rate increases were needed.
In the wake of Powell's speech, the dollar slipped
from one-month highs, sparking a jump in gold prices to as much
as 0.8% earlier in the session. The greenback was last down 0.1%
at 103.510.
"We may go a little bit higher but ultimately I think that
we are due for more of a correction and this (rise) is just a
pause," said Daniel Pavilonis, senior market strategist at RJO
Futures.
Minneapolis Fed President Neel Kashkari on Tuesday said the
U.S. central bank would perhaps have to raise interest rates to
at least 5.4% to tame high inflation.
With Fed officials John Williams, Michael Barr and
Christopher Waller due to speak during the week, "(they) are
going to talk about having to continue to fight inflation, which
would strengthen yields," added Pavilonis.
Gold is sensitive to high interest rates, which lift the
opportunity cost of holding the non-yielding asset.
Analysts at Commerzbank forecast gold prices at $1,850 by
mid-year and $1,950 by end-2023.
Spot silver fell 0.5% to $22.16 per ounce and
platinum dipped 0.1% to $971.05, while palladium jumped 3.1% to $1,647.87.
(Reporting by Seher Dareen and Bharat Govind Gautam in
Bengaluru; editing by Jonathan Oatis and Krishna Chandra Eluri)
