Gold retreats as Fed officials hint at big rate hikes

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Gold prices slipped on Thursday, as the

dollar and Treasury yields rebounded after comments from Federal

Reserve officials pointed to aggressive interest rate hikes

despite signs of slowing U.S. inflation.


* Spot gold fell 0.2% to $1,788.07 per ounce, as of

0123 GMT, after hitting its highest since July 5 at $1,807.79 on


* U.S. gold futures dipped 0.5% to $1,805.10.

* U.S. consumer prices did not rise in July due to a sharp

drop in the cost of gasoline, delivering the first notable sign

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of relief for Americans who have watched inflation climb over

the past two years.

* However, Minneapolis Fed Bank President Neel Kashkari said

that he continues to believe that the U.S. central bank will

need to raise its policy rate to 3.9% by year-end and to 4.4% by

the end of 2023 to fight inflation.

* Chicago Fed President Charles Evans remained more hawkish

than financial markets, expecting that U.S. rates will top out

at 4% next year.

* Gold is highly sensitive to rising U.S. interest rates, as

these increase the opportunity cost of holding non-yielding

bullion, while boosting the dollar, in which it is priced.

* The dollar index regained some footing to trade up

0.1% at 105.280 after falling to its lowest since June 29 at

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104.630 on Wednesday.

* Benchmark U.S. 10-year Treasury yields also

rebounded to 2.7860%, increasing the opportunity cost of holding

non-interest bearing gold.

* SPDR Gold Trust , the world’s largest gold-backed

exchange-traded fund, said its holdings fell 0.17% to 997.42

tonnes on Wednesday from 999.16 tonnes on Tuesday.

* Spot silver eased 0.2% to $20.53 per ounce,

platinum rose 0.2% to $943.31, and palladium

gained 0.2% to $2,244.33.


1230 US Initial Jobless Clm Weekly

1230 US PPI Machine Manufacturing July

(Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi




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