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Key U.S. inflation gauge slightly below expectations
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All precious metals set to gain in March
(Updates details and prices)
By Bharat Gautam and Deep Kaushik Vakil
March 31 (Reuters) - Gold prices were on track for a
second straight quarterly rise on Friday, as growing bets that
the U.S. Federal Reserve will slow the pace of interest rate
hikes drew investors to the metal.
Spot gold was down 0.6% at $1,968.25 per ounce by
2:26 p.m. EDT (1826 GMT), after prices moved as much as 0.4%
higher following data that showed U.S. consumer spending rose
modestly in February. U.S. gold futures settled down 0.6%
at $1,986.2.
"Gold jumped quickly but modestly after the market-friendly
PCE (personal consumption expenditures) report," said Tai Wong,
an independent metals trader based in New York.
"Bulls want a very strong close, ideally above $2,000, for
quarter-end as a springboard to challenge the $2,070 all-time
record, but the yellow metal looks a little tired."
The dollar index , while down for the quarter, firmed
on Friday, weighing on demand for the greenback-priced gold. Global stocks gained after the U.S. data, latching onto
hopes for a less challenging Fed interest rate regime. Gold,
seen as a safe haven, loses value when investors have an
appetite for riskier assets. Last week, gold topped $2,000 after the sudden collapse of
two U.S. regional lenders drove bets that the U.S. central bank
might pause interest rate hikes to stem the risk of contagion in
the global banking system.
Prices retreated after authorities initiated rescue
measures, though they have gained about 7.8% so far this
quarter.
"The mini-banking crisis has seen yields fall considerably and interest rate expectations pared significantly back, which has propelled gold higher," said Craig Erlam, senior market analyst at OANDA. Gold consumption in top hub China slowed this week as a steady rise in domestic prices started to bite, forcing dealers to offer discounts for the first time in months. Spot silver rose 0.4% to $23.96 per ounce, platinum added 0.6% at $991.77, and palladium was largely unchanged at $1,464.77. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Fed slowdown bets push gold toward second quarterly rise ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Bharat Govind Gautam, Ashitha Shivaprasad and Deep Vakil in Bengaluru; Editing by Jan Harvey, Krishna Chandra Eluri and Shilpi Majumdar)
