Gold Depressed by Strong Dollar and Expectation of March Rate Hike
Mar, 01st 04:56
Gold futures prices found themselves on a decline on Wednesday, depressed by a strengthening U.S. dollar. The greenback’s bull run was spurred by hawkish comments from U.S. Federal Reserve policymakers instead of highly-awaited Trump’s policy address.
U.S. gold futures dropped more than 0.5% to trade below $1243.00 an ounce in Asian trading session, hitting the lowest level since last Thursday. The precious metal looked set to extend its downward rally to a third straight day after a handful of Fed officials late Tuesday fueled speculations for a March U.S. rate hike.
While New York Fed President William Dudley said that the case for tightening monetary policy “has become a lot more compelling”, San Francisco Fed President John Williams stated that a rate increase next month was very much on the table given full employment and accelerating inflation.
According to CME Group’s Fed Watch Tool, traders saw a nearly 62% chance the U.S. central bank would raise its rate at a mid-March meeting. The dollar index, which measures the greenback against a basket of six major peers advanced 0.24 percent at 101.60.
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