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Gold hits highest since March 2022
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U.S. dollar index near 2-month low
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Local gold prices in India hit record high
(Adds graphic and details, updates prices)
By Kavya Guduru
April 5 (Reuters) - Gold prices rose on Wednesday to
their highest level since March 2022 after weak U.S. economic
data spurred safe-haven demand and expectations that the Federal
Reserve might loosen its stance on monetary policy tightening.
Spot gold was up 0.3% at $2,025.49 per ounce, as of
0716 GMT, in thin trade as China and Hong Kong markets were
closed for a holiday. U.S. gold futures firmed 0.2% to
$2,042.10.
The dollar index hovered near two-month lows, making
bullion cheaper for buyers holding other currencies. "Gold could continue to tear to the upside," given a slowing
global economy with high inflation, said Clifford Bennett, chief
economist at ACY Securities, adding that the dollar's weakness
was allowing gold to leap higher.
Gold prices rallied 2% to cross $2,000 per ounce on Tuesday
after another batch of weaker U.S. economic data pointed to a
slowing economy.
Local gold prices in India hit a record high of
61,399 rupees ($747.47) per 10 grams on Tuesday.
Data showed U.S. job openings in February dropped to the
lowest in nearly two years, suggesting the labour market was
cooling. A separate report showed new orders for
U.S.-manufactured goods fell for a second straight month in
February.
Gold is considered a hedge against inflation and economic
uncertainties, but higher interest rates dim non-yielding
bullion's appeal.
Metals firm MKS PAMP flagged a higher risk of future bank
failures and weaker economic activity as credit availability and
financial conditions tighten amid a sticky inflation backdrop,
which are "positive gold drivers".
The Fed is seen done raising interest rates and starting to
cut them in the summer. But Federal Reserve Bank of Cleveland
President Loretta Mester said while the economy appeared on a
path towards slowing down, the U.S. central bank likely had more
rate hikes ahead of it.
Spot silver shed 0.6% to $24.86 per ounce, platinum rose 0.5% to $1,022.26 and palladium was unchanged
at $1,457.77.
($1 = 82.1420 Indian rupees)
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(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry
Jacob-Phillips and Subhranshu Sahu)
