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Business News/ Market / Stock-market-news/  Global gold prices off 11-week highs after US Fed signals more rate hikes
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Global gold prices off 11-week highs after US Fed signals more rate hikes

Gold prices ease off multi-week highs as minutes from the Federal Reserve's last policy meeting raised expectations of a faster pace of US rate hikes

After rising for four previous sessions, spot gold was down 0.2% at $1,350.70 an ounce as of 8.49am and US gold futures fell 0.4% to $1,354.5 an ounce. Photo: ReutersPremium
After rising for four previous sessions, spot gold was down 0.2% at $1,350.70 an ounce as of 8.49am and US gold futures fell 0.4% to $1,354.5 an ounce. Photo: Reuters

Bengaluru: Gold prices eased off multi-week highs on Thursday as minutes from the Federal Reserve’s last policy meeting raised expectations of a faster pace of US rate hikes, but concerns about possible US military action against Syria limited losses.

After rising for four previous sessions, spot gold was down 0.2% at $1,350.70 an ounce as of 8.49am and US gold futures fell 0.4% to $1,354.5 an ounce.

All of the Federal Reserve’s policymakers felt that the US economy would firm further and that inflation would rise in the coming months, minutes of the central bank’s last policy meeting on March 20-21 released on Wednesday showed.

Higher interest rates discourage the buying of non-interest-paying bullion, which is priced in dollars.

Gold prices on Wednesday rose 1% and hit a high of $1,365.23 an ounce, its highest since 25 January.

“While we expect volatility to remain high, gold will stay supported so as long as U.S. military option remains on the table, gold will continue bid," said Stephen Innes, head of trading in Asia-Pacific for OANDA in Singapore.

“But we could see prices rocket higher if both the United States and Israel get drawn into the fracas siding with Saudi Arabia in Riyadh escalations with Tehran. A test of $1,400+ would be on the cards immediately."

US President Donald Trump warned Russia on Wednesday of imminent military action in Syria over a suspected poison gas attack, declaring that missiles “will be coming" and lambasting Moscow for standing by Syrian President Bashar al-Assad.

Gold is often used as a store of value during times of financial or political uncertainty.

Also underpinning bullion were lingering worries about a trade war between China and US.

China will not hesitate to fight back if the United States escalates its trade spat with Beijing, the commerce ministry said on Thursday, asserting that Chinese President Xi Jinping’s pledge to cut import tariffs is not a concession to Washington.

Among other precious metals, silver was steady at $16.63 an ounce, after hitting $16.87 in the previous session, a near two-month high. Platinum gained 0.3% to $929 per ounce and palladium fell 0.5% to $959.72 per ounce.

Palladium has surged 6% this week on the back of concerns that supply from number one producer Russia could be hurt by sanctions imposed by the US. Reuters

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Published: 12 Apr 2018, 10:17 AM IST
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