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U.S. dollar index down 0.2%
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U.S. 10-yr Treasury yields off 3-month peak
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Investors await U.S. PCE data due on Friday
(Adds details, updates prices)
By Kavya Guduru
Feb 23 (Reuters) - Gold prices rose on Thursday, helped
by a slight pullback in the dollar, although prospects of U.S.
interest rates staying higher for longer kept bullion on a tight
leash.
Spot gold was up 0.3% at $1,830.90 per ounce, as of
0708 GMT. U.S. gold futures eased 0.1% to $1,839.60.
Elevated interest rates dampen gold's appeal as an inflation
hedge while raising the opportunity cost of holding the
non-yielding asset.
Minutes from the Federal Reserve's latest policy meeting
showed on Wednesday policymakers agreed rates would need to move
higher, but that the shift to smaller-sized hikes would let them
calibrate more closely with incoming data.
"The Fed stated they're still looking at combating inflation
and raising interest rates, but not as aggressive as before...
because of that, gold prices have retreated a little, and this
morning they're just consolidating," said Brian Lan, managing
director at Singapore-based dealer GoldSilver Central.
Moreover, a slew of data in recent weeks pointed towards a
resilient U.S. economy, adding to concerns that the Fed would
continue with its monetary policy tightening path.
St. Louis Fed President James Bullard reiterated on
Wednesday that a Fed policy rate in the range of 5.25%-5.5%
would be adequate to tame inflation. Traders of Fed funds
futures expect rates to peak at 5.362% in July and remain above
5% through the year. Investor attention is now on the U.S. personal consumption
expenditures (PCE) data, the Fed's preferred inflation measure,
due on Friday.
"If the data shows that inflation has gone higher and not
lower, we might see a bit of a sell-off in gold," GoldSilver
Central's Lan said.
The dollar index eased 0.2%, making bullion cheaper
for buyers holding other currencies. Benchmark U.S. 10-year
Treasury yields slipped from a three-month peak hit
on Wednesday.
Spot silver gained 0.5% to $21.61 per ounce, platinum climbed 0.5% to $953.13 and palladium lost 0.6% to
$1,472.72.
(Reporting by Kavya Guduru in Bengaluru; editing by Uttaresh.V
and Subhranshu Sahu)
