Gold dips amid firm dollar, concerns over aggressive U.S. rate hikes
Gold prices edged lower on Wednesday
after hotter-than-expected U.S. inflation data boosted the
dollar and fueled expectations that the Federal Reserve will
continue on aggressive policy tightening path.
* Spot gold fell 0.2% to $1,698.14 per ounce, as of
0120 GMT. Prices fell 1.3% on Tuesday, its biggest one-day
percentage decline since July 14.
* U.S. gold futures were down 0.4% at $1,710.
* The dollar index , which measures the currency
against six major peers, ticked 0.1% higher after recording its
biggest one-day percentage gain since March 2020 overnight.
* Benchmark U.S. Treasury yields hovered close
to a near three-month peak touched on Tuesday.
* U.S. consumer prices unexpectedly rose in August and
underlying inflation accelerated amid rising costs for rents and
healthcare, giving the Fed ammunition to deliver a third 75
basis points interest rate hike next Wednesday.
* The Fed is likely to raise U.S. borrowing costs faster and
further than previously expected after the inflation data, with
Nomura’s economists saying they now believe a 100 basis-point
rate hike is the most likely outcome at the September meet.
* Even though gold is seen as a hedge against inflation,
higher interest rates increase the opportunity cost of holding
the bullion while boosts the dollar, in which the precious metal
* Holdings of SPDR Gold Trust , the world’s largest
gold-backed exchange-traded fund, said its holdings fell 0.21%
to 962.88 tonnes on Tuesday from 964.91 tonnes on Monday.
* Spot silver dipped 0.2% to $19.29 per ounce.
Platinum edged 0.3% higher to $880.67 and palladium
fell 1% to $2,083.18.
0600 UK CPI YY Aug
1230 US PPI Machine Manufacturing Aug
(Reporting by Eileen Soreng in Bengaluru; editing by