Spot gold fell 0.2% to $1,927.35 an ounce at 10:20 a.m. ET (1520 GMT), after hitting its highest since late April 2022 earlier in the session. US gold futures rose 0.3% to $1,922.30.
The dollar index gained 0.2% against its rivals, making greenback-priced bullion cheaper for many buyers, while benchmark yields on the 10 US Treasuries hit a near high high. of a week. [USD/][US/]
An S&P Global survey showed price pressures rising for the first time since last spring, indicating inflation is far from licked despite the Fed’s aggressive measures to contain it.
“I think gold is still holding pretty strong as market expectations shift more towards a Fed pause potentially, or more policy accommodation,” said Ryan McKay, commodity strategist at TD Securities.
The US central bank made four consecutive rate hikes of 75 basis points (bps) before slowing its pace to 50bps last month to combat soaring inflation.
Traders are now pricing in a 96% chance of the Fed raising rates by 25 basis points at its policy meeting next week. “As expected inflation continues to decline, there will be less need for Fed interest rate hikes and the market is really focused on the idea of an end to the Fed interest rate cycle,” said David Meger, director of metals trading at High Peak Futures.
Although gold is seen as a hedge against economic uncertainties, higher rates tend to dampen the appeal of zero-return bullion.
Elsewhere, spot silver rose 0.1% to $23.47 an ounce. Holdings of New York-based iShares Silver Trust exchange-traded fund rose 4% on Monday. [GOL/ETF]
Platinum gained 0.6% to $1,052.75 and palladium jumped 1.2% to $1,725.13.
(Reporting by Seher Dareen in Bengaluru; Editing by Krishna Chandra Eluri)