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U.S. dollar index up 0.3%
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U.S. weekly jobless claims data due at 1330 GMT
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Fed officials debate higher vs longer after inflation jump
(Updates prices)
By Ashitha Shivaprasad
March 2 (Reuters) - Gold prices were set to break a
three-session winning run on Thursday, weighed down by a firmer
dollar and as bullion's outlook remains clouded by prospects of
further interest rate hikes from the U.S. Federal Reserve.
Spot gold was down 0.1% at $1,835.80 per ounce as of 1143 GMT, after hitting a one-week peak in the previous session. U.S. gold futures fell 0.2% to $1,841.40.
"Near-term challenges remain for gold and other precious metals on further rate hikes," said UBS analyst Giovanni Staunovo. "The focus of market participants remains on U.S. economic data and how it impacts the monetary policy of the Fed." The Institute for Supply Management survey on Wednesday showed raw materials prices increasing last month, with the rebound in prices at the factory gate suggesting inflation could remain elevated for longer. While gold is considered a hedge against inflation, recent central bank rate hikes to bring down price pressures have weighed on the appetite for the metal since it yields no interest. U.S. central bank officials were divided on Wednesday over whether recent high inflation data and a resilient jobs market will require even more restrictive interest rates, or just patience in maintaining tight monetary policy for a longer period of time.
Investors will be watching U.S. weekly initial jobless claims data due at 1330 GMT.
Further weighing on bullion, benchmark U.S. 10-year Treasury
yields scaled their highest level since early
November 2022, while the U.S. dollar index gained 0.3%. Elsewhere, spot silver dipped 0.9% to $20.81 per
ounce. Platinum rose 0.4% to $958.52, while palladium lost 0.5% at $1,432.21.
"We continue to favor platinum over palladium, with platinum
benefiting from power outages in South Africa, the largest
platinum producer, while palladium suffers from weaker growth in
North America and Europe," Staunovo said.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Jan
Harvey, Shilpi Majumdar and Eileen Soreng)
