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India's January gold imports plunge 76% to 32-month low
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Spot gold down 4.7% this month
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Path of least resistance for gold is lower - analyst
(Updates prices)
By Arundhati Sarkar
Feb 16 (Reuters) - Gold prices were steady on Thursday
due to a slight pullback in the dollar and bond yields, while
gains were kept in check by signs of a resilient U.S. economy
that could offer room for the Federal Reserve to raise interest
rates further.
Spot gold was little changed at $1,836.39 per ounce
by 1322 GMT, after hitting its lowest level since early January
on Wednesday. U.S. gold futures rose 0.2% to $1,848.20.
Benchmark U.S. 10-year Treasury yields eased, while the
dollar slipped 0.2% against its rivals after hitting a near
six-week high on Wednesday, making gold cheaper for other
currency holders.
"Gold is seeing a 'dead cat bounce' or a temporary recovery
after a significant decline on some bargain hunting. Recession
fears are lending some support to the gold market as is a modest
correction in the dollar," independent analyst Ross Norman said.
For now, the path of least resistance is lower and bears
have the upper hand, Norman added.
Gold prices have fallen 4.7% this month, on track for the
biggest monthly drop since June 2021 if losses hold.
Strong retail sales numbers on Wednesday, after Tuesday's
data showing stubbornly high U.S. inflation for last month, have
reinforced concerns that the Fed would keep interest rates
higher for longer given a resilient American economy.
Several Fed policymakers this week have signalled that more
increases are needed to bring inflation down to the central
bank's 2% target.
Higher interest rates discourage investment in non-yielding
gold, although it is considered a hedge against inflation and
economic uncertainty.
In the physical market, India's January gold imports plunged
76% from a year earlier to a 32-month low, a government source
told Reuters.
Elsewhere, spot silver fell 0.3% to $21.57 per ounce,
platinum fell 0.4% to $911.37, while palladium rose 0.5% to $1,471.07.
(Reporting by Arundhati Sarkar in Bengaluru, additional
reporting Seher Dareen; Editing by Robert Birsel, Sherry
Jacob-Phillips and Shounak Dasgupta)
