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U.S. dollar poised for monthly gain
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All precious metals on track for monthly falls
(Updates prices)
By Bharat Gautam
Feb 28 (Reuters) - Gold prices on Tuesday were headed
for their biggest monthly decline since June 2021 as a stronger
dollar and fears that the U.S. Federal Reserve would keep
raising interest rates weighed on the non-yielding asset's
appeal.
Gold prices touched their highest since April 2022 in early
February, but soon reversed course. Bullion has fallen more than
5% so far this month after strong economic data boosted
expectations of more rate hikes.
However, on Tuesday, spot gold rose 0.6% to
$1,828.28 per ounce by 2:02 p.m. ET (1902 GMT), having earlier
hit its lowest since late December at $1,804.20. U.S. gold
futures firmed 0.7% to settle at $1,836.70.
People could use these recent lows as an opportunity to buy gold and get long, said Daniel Pavilonis, senior market strategist at RJO Futures.
In the next few weeks, the dollar and U.S. yields could ease and buoy gold, after which prices are likely to slip (as the Fed keeps hiking rates), and drop towards $1,700 per ounce, Pavilonis said.
The dollar, in which gold is priced, is on track for its first monthly gain in five, making gold more expensive for overseas buyers. Strength in the greenback has helped put bullion prices on track for their first monthly decline in four. Fed Governor Philip Jefferson said he was under "no illusion" that the U.S. central bank's fight to curb inflation would end soon. Gold is having a negative month as the market is expecting interest rates to remain higher for longer, said Carlo Alberto De Casa, external analyst at Kinesis Money.
"If inflation continues to rise, then gold might fall to the
$1,730-$1,740 range."
Spot silver gained 1.6% to $20.95 per ounce, and
platinum firmed 1.8% to $954.91, while palladium dropped 0.8% to $1,419.72. All were set for monthly declines.
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(Reporting by Bharat Govind Gautam, Ashitha Shivaprasad and
Kavya Guduru in Bengaluru; Editing by Shinjini Ganguli)
