Markets 2 MIN READ

Gold inches lower on expectations of more rate hikes

December 19, 2022By Reuters

Gold prices eased in early Asian hours on Monday, as the market expected more interest rates hikes in the next year by the US Federal Reserve.

* Spot gold was down 0.1% at USD 1,791.25 per ounce as of 0010 GMT. US gold futures were little changed at USD 1,800.70.

* Fed policymakers may need to lift US borrowing costs above the peak 5.1% they penciled in just this week, and keep them there perhaps into 2024 to squeeze high inflation out of the economy, three of them signaled on Friday.

* Higher interest rates tend to weigh on the bullion’s appeal, as it increases the opportunity cost of holding the non-yielding asset.

* The dollar index was up 0.1%. A stronger greenback makes gold more expensive for overseas buyers.

* Indian gold dealers offered bigger discounts to attract consumers who delayed purchases due to a spike in prices last week, while China’s reopening plans have kept premiums firm in the world’s top bullion buyer.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.4% to 910.40 tonnes on Friday.

* Spot silver fell 0.3% to USD 23.14, platinum rose 0.3% to USD 994.53 and palladium was up 1.1% to USD 1,732.59.



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(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich)

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