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Gold slips as dollar firms after US data signals resilient economy

Spot gold lost 0.1% to $2,024.01 an ounce by 10:56 a.m. ET (1556 GMT), after hitting its highest since Feb. 9 of $2034.69 earlier in the session. US gold futures was steady at $2,033.50.

February 22, 2024 / 23:24 IST
Gold slips as dollar firms after US data signals resilient economy

Gold prices fell from a near two-week high on Thursday, driven by a firm US dollar after jobless claims data indicated a strong economy, while investors awaited further economic data for guidance on the US Federal Reserve's interest rate stance.

Spot gold lost 0.1% to $2,024.01 an ounce by 10:56 a.m. ET (1556 GMT), after hitting its highest since Feb. 9 of $2034.69 earlier in the session. US gold futures was steady at $2,033.50.

"We see gold stay at these levels and there is more downside risks to gold in the short term than upside" if we get more positive data on the US economy and if inflation doesn't continue to ease, said Chris Gaffney, president of world markets at EverBank.

The dollar gained 0.1% after data showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth likely remained solid in February.

A stronger dollar makes bullion expensive for other currency holders.

Minutes of the Fed's latest policy meeting released on Wednesday showed that a majority of the central bank's policymakers are concerned about the risks of cutting interest rates too soon.

Lower interest rates boost the appeal of holding non-yielding gold, with markets pricing in about a 66% chance of a June rate cut, as per the CME Fed Watch Tool.

Geopolitical risks seem to support the safe-haven aspect of gold and technical charts show that gold has established a "pretty hard floor" at around $2000 level, Gaffney added.

The conflict in the Middle East has intensified with Israel's bombardment of Rafah in Gaza's south.

In other precious metals, spot platinum was up 1.9% at $899.90 an ounce, palladium rose 1.4% to $963.25 and silver lost 0.2% to $22.82.

 

Reuters
first published: Feb 22, 2024 11:22 pm

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