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By Arundhati Sarkar
(Reuters) – Gold steadied on Tuesday after dropping to a nine-month low earlier as investors positioned for U.S. economic data, with a strong dollar and bets for steep interest rate hikes still keeping a leash on non-yielding bullion.
Spot gold was little changed at $1,734.59 per ounce by 0916 GMT after hitting $1,722.36 earlier in the session, its lowest since Sept. 30. U.S. gold futures rose 0.1% to $1,733.60.
The dollar climbed to a 20-year peak against a basket of major rivals, making greenback-priced gold more expensive for buyers holding other currencies. [USD/]
“Gold is set to stay significantly suppressed over the near-term, as the weight of more incoming super-sized Fed rate hikes hang like a millstone around gold’s neck,” said Han Tan, chief market analyst at Exinity.
“A higher-than-expected headline CPI print (on Wednesday)should pave the way for yet another 75 basis points hike by the Fed later this month; a scenario widely interpreted to be a negative for gold,” Tan added.
However, offering some support for zero-yield gold, benchmark U.S. 10-year Treasury yields dropped for a second consecutive session. [US/]
A raft of U.S. economic data – including consumer prices, retail sales and factory output – should provide a glimpse of the extent to which inflation has peaked as the Federal Reserve moves closer to next week’s policy meeting.
Meanwhile, the euro sank to within a whisker of parity with the dollar and stock markets fell as the prospect of further central bank tightening and worries about the health of economies worldwide unnerved investors. [MKTS/GLOB]
“Gold seems to have found a few friends near $1,730 over the last couple of days, without ever seriously looking like it would reverse its recent selloff,” OANDA senior analyst Jeffrey Halley said.
Spot silver dropped 1% to $18.90 per ounce, platinum fell 1.7% to $855.04 and palladium slipped 1.4% to $2,132.90.
(Reporting by Arundhati Sarkar and Bharat Govind Gautam in Bengaluru; Editing by Krishna Chandra Eluri)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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