Gold Slides Over 1% As Strong U.S. Data Boosts Dollar – Reuters

Gold products are pictured on display at Korea Gold Exchange in Seoul, South Korea, August 6, 2020. REUTERS/Kim Hong-Ji

Jan 27 (Reuters) – Gold prices slid 1% to a more than two-week low on Thursday, as the dollar rallied after robust U.S. economic data strengthened the case for interest rate hikes by the Federal Reserve in March.

Spot gold declined 1.1% to $1,798.00 an ounce by 10:32 a.m. ET (1532 GMT), having hit a low of $1,794.80 earlier. U.S. gold futures dropped 1.4% to $1,803.30.

The drop in gold prices is a continuation of Wednesday’s selloff as markets further digested Fed Chair Jerome Powell’s comments on raising rates, said Philip Streible, chief market strategist at Blue Line Futures in Chicago. read more

Gold could find support again if Russia-Ukraine tensions escalate, Streible added. read more

U.S. economic growth accelerated in the fourth quarter to post its best performance in nearly four decades in 2021. read more

Further hurting safe-haven gold’s appeal for overseas buyers, the dollar (.DXY) soared to its highest levels since July 2020.

Higher yields and interest rate hikes dent the appeal of non-yielding bullion, which has declined more than 3% since hitting its highest in 10 weeks on Tuesday.

“Any rebound not backed by safe-haven seekers should thus run into resistance sooner or later as long as the economy is in recovery mode,” Julius Baer analyst Carsten Menke wrote in a note.

Menke added that they do not see a broad-based move into gold from safe-haven seekers but rather some selective buying which should remain the case as long as the economic backdrop does not sharply deteriorate.

Elsewhere, spot silver dropped 3.4% to $22.69 an ounce, set its for biggest one-day decline since end-September, and platinum fell 1.7% to $1,013.50.

Palladium rose for the eighth straight session by 0.4% to $2,339.00.

Reporting by Kavya Guduru in Bengaluru, additional reporting by Swati Verma; Editing by Devika Syamnath

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