Gold gains on dollar pullback; investors weigh Fed rate hike prospects

Krasnoyarsk, April 17 (BNA): Gold rose as the dollar weakened slightly but prices retreated from last week’s one-year highs as mixed economic data prompted investors to reassess the path of the US Federal Reserve’s interest rate hike.

Spot gold was up 0.5% at $2,012.62 an ounce, as of 0646 GMT. US gold futures rose 0.4 percent to $ 2,024.70, according to Reuters.

The dollar index fell 0.1%, making bullion cheaper for overseas buyers.

Gold fell 2% on Friday after data showed resilience in US core retail sales in March.

Other data showed that households expect inflation to rise over the next 12 months.

Separately, production at US factories fell in March, but posted modest gains in the first quarter.

Gold also maintains a strong correlation with real yields, and price action remains sensitive to US inflation and employment data, Standard Chartered analyst Suki Cooper said in a note.

CME FedWatch shows markets pricing in an 82.2% chance of up 25 basis points in May, reducing the appeal of non-yielding bullion.

While $2,075 and $2,100/oz remain major hurdles, we remain bullish, Citi said in a note, adding that financial stability pressures are providing positive winds for longer-term safe-haven assets like gold.

Spot silver prices rose 0.5 percent to $25.45 an ounce, platinum fell 0.3 percent to $1042.01, and palladium fell 0.5 percent to $1496.41.


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