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Gold off 1-week high hit on Wednesday
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U.S. dollar index up 0.2%
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Platinum down from 3-week peak scaled on Wednesday
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U.S. 10-yr Treasury yields hit highest since November
(Updates prices)
By Kavya Guduru
March 2 (Reuters) - Gold prices slipped on Thursday as
the dollar firmed, with a fresh set of economic data cementing
investor worries that global interest rates would stay higher
for longer than expected.
Spot gold was down 0.3% at $1,831.90 per ounce, as of
0714 GMT, after hitting a one-week peak on Wednesday. U.S. gold
futures fell 0.4% to $1,838.50.
Although gold is considered a hedge against inflation,
higher interest rates to tame rising prices increase the
opportunity cost of holding non-yielding bullion.
Gold prices "are just consolidating. The dollar has
strengthened and that's why we see gold prices coming down a
little," said Brian Lan, managing director at Singapore-based
dealer GoldSilver Central.
The dollar index rose 0.2%, making bullion less
affordable for buyers holding other currencies. Benchmark U.S.
10-year Treasury yields hit their highest since
November. Data on Wednesday showed U.S. manufacturing contracted for a
fourth straight month in February, but there were signs that
factory activity was starting to stabilise, with a measure of
new orders pulling back from a more than 2-1/2-year low.
"Gold probably might be range-bound until we get more
data... many (are) eyeing what the U.S. Federal Reserve's going
to do this month when they meet and whether they will continue
to raise interest rates and by how much, which is the key
question," GoldSilver Central's Lan said.
Fed policymakers will provide updated projections on the
U.S. central bank's monetary policy path at the end of their
March 21-22 meeting.
Money markets expect the Fed's target rate to peak at 5.488%
in September. Data on Wednesday showed German consumer prices rose more
than anticipated in February, following Tuesday's data showing
inflation rose unexpectedly in France and Spain - pushing up
European Central Bank rate hike expectations.
Spot silver fell 0.8% to $20.82 per ounce and
palladium lost 0.6% to $1,431.12.
Platinum fell 0.5% to $950.87, after scaling a
three-week high in the previous session.
(Reporting by Kavya Guduru in Bengaluru; Editing by Subhranshu
Sahu, Nivedita Bhattacharjee)
