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Gold lower after two sessions of gains
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U.S. dollar up 0.1%
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Sharp rise in gold-backed ETF inflows in recent weeks- ANZ
(Updates prices)
By Kavya Guduru
March 24 (Reuters) - Gold prices slipped on Friday as
the dollar edged higher, while investors assessed the U.S.
central bank's hints at a potential pause in its rate-hike
trajectory.
Spot gold was down 0.4% at $1,986.40 per ounce at
0707 GMT, after two sessions of sharp gains. U.S. gold futures also fell 0.4% to $1,988.90.
Non-yielding bullion, which becomes more attractive in a
low-interest-rate environment, gained 2% after the Federal
Reserve signalled it might pause further rate increases after
the recent collapse of two U.S. banks, and pointed to just one
more rate hike this year.
"However, the Fed also mentioned it would not look to cut
interest rates this year," said Brian Lan, managing director at
Singapore-based dealer GoldSilver Central.
Lan noted some profit-taking at play, and added, "gold
prices would look to consolidate, unless there's any big news."
The dollar index edged 0.1% higher, making bullion expensive for overseas buyers. The Bank of England on Thursday raised interest rates for the 11th time in a row. The Swiss National Bank raised rates by 50 basis points and said UBS's takeover of Credit Suisse had averted a financial disaster. "The key focus is still on the banking crisis in the U.S., they're looking at whether there's further contagion to that effect," GoldSilver's Lan said. Gold shot over the $2,000-level to a one-year peak earlier this week on safe-haven demand, but has since pulled back from those levels, although financial system uncertainties remain. U.S. Treasury Secretary Janet Yellen on Thursday sought to reassure jittery investors that American bank deposits were safe and promised policymakers had more firepower to battle any crisis. "An increase in net long positions by speculators has been driven by both new longs and short covering. The inflows into gold-backed ETFs have risen sharply in recent weeks," ANZ said in a note. Spot silver fell 0.4% to $23.03 per ounce, while platinum inched up 0.1% to $985.45, while palladium dropped 0.9% to $1,418.39.
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(Reporting by Kavya Guduru in Bengaluru; Editing by Subhranshu
Sahu and Sherry Jacob-Phillips)
