off-the-wire

PRECIOUS-Gold prices steady as dollar retreats; Fed rate path in focus

Kitco Media
By Reuters
Published:
Updated:
Reuters
April 24 (Reuters) - Gold was steady on Monday as the dollar pulled back, although bullion's appeal was limited after U.S. business activity data last week backed expectations of a 25-basis-point interest rate hike by the Federal Reserve at its May meeting.
FUNDAMENTALS
* Spot gold held its ground at $1,983.68 per ounce, as of 0107 GMT, after slipping 1% on Friday. U.S. gold futures edged 0.2% higher at $1,993.30.
* The dollar index was down 0.1%, making gold more affordable for buyers holding other currencies.
* Gold prices on Friday were pressured by surveys that showed U.S. and euro zone business activity gathered pace in April, despite central bankers signalling they are nearing the peak of their interest rate-hiking cycles designed to cool demand enough among consumers to bring high inflation down.
* Federal Reserve Governor Lisa Cook said on Friday the outlook for the next stage of central bank monetary policy has grown less clear after the institution has taken appropriately aggressive steps over the last year to lower price pressures.
* The CME FedWatch tool shows that markets are pricing in an 89.1% chance of a 25-basis-point hike by the Fed at its May 2-3 meeting.
* Gold is considered a hedge against inflation, but higher interest rates dim the non-yielding asset's appeal.
* Elevated domestic prices kept physical gold demand muted across Asian hubs last week, forcing dealers in India to offer discounts for a sixth straight week, with the Akshaya Tritiya festival also failing to offer much respite.
* Spot silver edged up 0.2% to $25.08 per ounce, while platinum dropped 1.7% to $1,105.55 and palladium shed 1% to $1,586.79.


DATA/EVENTS (GMT) 0800 Germany Ifo Business Climate New 0800 Germany Ifo Curr Conditions New 0800 Germany Ifo Expectations New (Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips)

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