Gold Drops 0.89% to $1,237.37 on Dollar Pressure

Gold

 

Gold on Wednesday, March 1, dipped as the dollar gained after comments from U.S. Federal Reserve officials raised expectations of an interest rate hike in March, CNBC reports.

Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar in which it is priced.

Spot gold dropped 0.89 percent to $1,237.37 per ounce, heading for a third straight day of losses. The metal hit its highest since Nov. 11 at $1,263.80 on Feb. 27.

New York Fed President William Dudley — one of the most influential U.S. central bankers — said the case for tightening monetary policy had become “a lot more compelling,” while San Francisco Fed President John Williams said he saw “no need to delay” raising rates.

Money market futures are now pricing in close to a 70 percent chance of a rise in official interest rates in March, compared with a little more than 30 percent on Tuesday.

“Rate rises are now priced in to futures but not in to gold, so the risk is to the downside (for gold),” said Mitsubishi analyst Jonathan Butler.

U.S. gold futures fell 1.28 percent to $1,237.80.Spot silver inched down 0.19 percent to $18.27 per ounce. Platinum was down 1.06 percent at $1,012.35, while palladium rose 0.56 percent to $773.25.

 

 

 

 

 

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