Gold steadies after fall on Fed rate hike expectations

By: | Updated: March 6, 2017 8:01 AM

Gold prices held steady early on Monday, supported by a weaker dollar, after falling to the lowest since in over two weeks in the previous session after the U.S. Federal Reserve signaled it would raise interest rates in March.

The metal hit ,222.51, the lowest since Feb. 15, in the previous session.U.S. gold futures were up 0.7 percent to ,235.1. (Reuters)

Gold prices held steady early on Monday, supported by a weaker dollar, after falling to the lowest since in over two weeks in the previous session after the U.S. Federal Reserve signaled it would raise interest rates in March. Spot gold was little changed at $1,234.51 per ounce at 0050 GMT. The metal hit $1,222.51, the lowest since Feb. 15, in the previous session.U.S. gold futures were up 0.7 percent to $1,235.1. The U.S. Federal Reserve’s long-stalled ‘liftoff’ of interest rates may finally get airborne this year as policymakers from Chair Janet Yellen to regional leaders across the United States signaled that the era of easy money is drawing to a close. Yellen capped off a seemingly coordinated push from the central bank when she cemented the view that the Fed will raise interest rates at its next meeting on March 14-15, and likely be able to move faster after that than it has in years.

The Fed raised interest rates for only the second time in a decade at its policy meeting last December, but has forecast three rate increases this year on the back of the low unemployment rate – currently 4.8 percent – and rising inflation.

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The dollar index was down 0.2 percent to 101.39. The dollar dipped in Asian trading on Monday, as investors locked in gains after the greenback’s rise last week on growing expectations of a U.S. interest rate hike this month. * Market participants also kept an eye on developments in North Korea, which fired four ballistic missiles early on Monday, three of which landed in Japan’s exclusive economic zone, Japanese Prime Minister Shinzo Abe said.

Asian shares and U.S. stock futures dropped on Monday as investors weighed the near-certain prospect of an interest rate hike in the U.S. against news of slower growth in China this year. Hedge funds and money managers boosted their net long position in COMEX gold to the highest in more than three months in the week to Feb. 28, US Commodity Futures Trading Commission data showed on Friday. SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.56 percent to 840.58 tonnes on Friday.

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