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Fed minutes, U.S. PCE data due this week
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Thin trade on Monday due to Presidents' Day holiday in
U.S.
(Updates prices)
By Seher Dareen
Feb 20 (Reuters) - Gold prices edged higher on Monday
with gains capped by a slightly higher dollar, as investors
awaited upcoming U.S. economic data for clues on the Federal
Reserve's rate-hike path.
Spot gold rose 0.1% to $1,843.93 per ounce by 1322
GMT, after falling to its lowest since late December in the
previous session. U.S. gold futures rose 0.13 % to
$1,852.50.
"We still look for higher prices over the coming quarters,
but near term, I think gold will stay volatile until U.S.
economic data indicates a slowdown in economic activity," said
UBS analyst Giovanni Staunovo.
Economic data last week showed signs of a resilient U.S.
economy and a tight labour market, sparking concerns that the
Fed would keep interest rates higher for longer.
Investor attention will be on the release of the Federal
Open Market Committee's January meeting minutes and U.S. GDP
data.
Several Fed officials last week signalled that more rate
hikes were needed to bring inflation down to the central bank's
2% target.
"Further dollar-led weakness could see gold target support
in the $1,792 to $1,776 area with resistance at $1,872," Saxo
Bank analyst Ole Hansen said in a note.
The dollar index was slightly higher on the day,
weighing on the precious metal.
Markets expect the Fed funds rate to peak just under 5.3% by
July, with analysts seeing the dollar having run its course for
now. Benchmark U.S. Treasury yields reached their highest in over
three months on Friday as well. Higher interest rates discourage investment in non-yielding
gold, although it is considered a hedge against soaring prices.
Spot silver rose 0.4% to $21.81 per ounce, platinum jumped 2.1% to $935.41, while palladium was up
nearly 2% at $1,527.51.
Liquidity is expected to be thin on Monday, with U.S.
markets closed for Presidents' Day.
(Reporting by Seher Dareen in Bengaluru; Editing by Janane
Venkatraman and Shounak Dasgupta)
