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Minutes of Jan. 31-Feb. 1 FOMC meeting due on Feb. 22
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Dollar en-route for third weekly rise
(Updates prices)
By Seher Dareen
Feb 17 (Reuters) - Gold prices edged higher on Friday
but were still on track for their third straight weekly dip,
weighed down by an overall stronger dollar and bond yields
following fresh hawkish rhetoric from U.S. Federal Reserve
officials.
Spot gold was up 0.3% at $1,842.27 per ounce by 2:40
p.m. ET (1940 GMT), after earlier falling to its lowest since
late December. Prices have fallen 1.2% so far this week.
U.S. gold futures settled 0.1% lower at $1,850.20.
The dollar's advance, paired with the hawkish outlook from
members of the Fed, was weighing on the market, said Phillip
Streible, chief market strategist at Blue Line Futures in
Chicago.
Fed officials this week said the U.S. central bank likely
should have lifted interest rates more than it did early this
month, with Fed Governor Michelle Bowman reiterating the 2%
inflation goal.
The dollar index was on track for its third straight
week of gains, making bullion less attractive for overseas
buyers, while bond yields also climbed. Higher interest rates increase the opportunity cost of
holding zero-yield bullion. Prices of the precious metal are
down about 7.3% since its nine-month peak earlier this month.
Goldman Sachs said it expected the Fed to raise rates three
more times this year by a quarter of a percentage point each.
Traders await next week's release of the latest FOMC minutes
and U.S. GDP data for more clues on the path of rate hikes.
"The test for the Fed will occur if and when the economy
weakens without inflation declining rapidly ... should the Fed
react to those potential outcomes by easing policy, then gold
should perform well," said Caesar Bryan, portfolio manager of
the Gabelli Gold Fund.
Spot silver gained 0.7% to $21.7586 per ounce,
while palladium was down 0.8% at $1,499.21.
Platinum was steady at $919.00, after earlier
touching its lowest since November.
Russia is likely to limit exports of key metals such as
palladium if the United States imposes steep taxes on imports of
aluminium from Russia, analysts said.
(Reporting by Seher Dareen in Bengaluru; Editing by Shounak
Dasgupta, Mark Potter and Susan Fenton)
