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Platinum slides more than 3%
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Focus also on U.S. jobs data due Friday
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Silver, platinum down over 4%
(Updates prices)
By Bharat Gautam
March 7 (Reuters) - Gold prices fell more than 1% on
Tuesday, as the dollar jumped after Federal Reserve Chair Jerome
Powell indicated rate hikes could come at a faster pace from the
U.S. central bank in his testimony to a congressional committee.
Spot gold was down 1.8% at $1,813.11 per ounce by
1:54 p.m. ET (1854 GMT). U.S. gold futures fell 1.9% to
settle at $1,817.70 per ounce.
The Fed will likely need to raise interest rates more than
expected in response to recent strong data and is prepared to
move in larger steps if the "totality" of incoming information
suggests tougher measures are needed to control inflation,
Powell told U.S. lawmakers on Tuesday.
"This direct reference to 'faster tightening' even if
mitigated by 'if warranted' is more of a shove than a nudge,
putting the precious metals complex under pressure as the dollar
surges," said Tai Wong, a senior trader at Heraeus Precious
Metals in New York.
The dollar index gained over 1% following Powell's
comments, making bullion less affordable for overseas buyers. "Gold had already retreated from Friday's strong close, but
so far Powell is more direct and aggressive than market had
anticipated," Wong said.
U.S. stock indexes also fell after the remarks. The U.S. jobs report for February is due on Friday.
If Friday's jobs data shows significant resilience in the
U.S. labour market, it would pave the way for even higher U.S.
rates and could unwind the month-to-date gains garnered so far
by gold, said Han Tan, chief market analyst at Exinity.
Despite being known as an inflation hedge, higher interest
rates dent bullion's appeal as they increase the opportunity
cost of holding a zero-yield asset.
Spot silver lost 4.7% to $20.04 per ounce and
platinum dropped 4.7% to $929.96. Palladium fell
3.6% to $1,388.63.
(Reporting by Bharat Govind Gautam and Ashitha Shivaprasad in
Bengaluru; Editing by Shounak Dasgupta and Krishna Chandra
Eluri)
