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Platinum, palladium jump
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Dollar slips from near seven-week high
(Updates prices)
By Bharat Gautam
Feb 27 (Reuters) - Gold prices ticked up on Monday as
the dollar retreated, although worries of further interest rate
hikes from the U.S. Federal Reserve kept bullion near a
two-month low.
Spot gold rose 0.4% to $1,817.69 an ounce by 1:45
p.m. ET (1845 GMT). U.S. gold futures were up 0.4% to
settle at $1,824.90.
The dollar index fell 0.5% after hitting a seven-week
peak, making gold less expensive for overseas buyers. Gold has support around $1,806 but it has been sliding on
higher-than-expected inflation and economic data continues to be
firm, Bart Melek, head of commodity markets strategy at TD
Securities, said.
After hitting their highest since April 2022 this month,
gold prices have fallen by more than 7% after U.S. data pointed
to a resilient economy.
Data on Friday showed U.S. consumer spending increased by
the most in nearly two years in January, while inflation
accelerated, adding to market fears the Fed could continue
raising interest rates.
"Given how the Fed's favoured measure of inflation accelerated in January, appetite for zero-yielding gold may be soured by rate-hike bets in the near term – ultimately dragging prices lower," Lukman Otunuga, senior research analyst at FXTM, said. "Gold (will) remain highly sensitive to chatter by Fed officials, key economic data and any topic relating to inflation as we head into the new month."
Rising interest rates dull gold's appeal as they increase the opportunity cost of holding the non-yielding asset.
Spot silver dipped 0.5% to $20.67 per ounce. Platinum climbed 3.3% to $939.58, and palladium gained 1.7% to $1,427.67. Although a recession remains possible, there is significant physical buying for platinum and palladium from Asia, and supply issues in Russia and South Africa, which are helping the metals to rally, Malek said. (Reporting by Bharat Govind Gautam and Ashitha Shivaprasad in Bengaluru; Editing by Barbara Lewis and Krishna Chandra Eluri)
