Gold set for third weekly loss as faster talks weigh in


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Gold prices were set for their third consecutive weekly loss although they were flat on Friday, as US Federal Reserve Chairman Jerome Powell said asset purchases in the era of the pandemic could end sooner than expected.

Spot gold rose 0.1% to $ 1,770.80 an ounce at 11:07 am GMT, after hitting its lowest level in nearly a month on Thursday.

US gold futures rose 0.5% to $ 1,770.70.

“The Fed chairman’s incredibly hawkish tone, coupled with the dominating strength of the US dollar, are two things that combine to make the gold market shine,” independent analyst Ross Norman said.

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And if the nonfarm payroll figures are high, it could increase the dollar’s strength and gold could slide further to $ 1,750 and below, Norman said, adding that the Fed’s inflation story and the rate hikes prevented investors from buying the metal.

A stronger dollar weakens the attractiveness of gold to those who hold other currencies.

Gold has fallen 1.1% so far in the week, with several Fed officials suggesting the central bank could speed up the reduction in stimulus measures, with Powell saying the move could be made at its next. political meeting.

Gold is often seen as a hedge against inflation, but the reduction in central bank stimulus and interest rate hikes tend to push up government bond yields, resulting in lower government bond yields. higher opportunity cost for holding non-interest bearing bullion.

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“(And) while growing bets on faster monetary policy tightening and dollar strength are downside risks, inflation is expected to stay high through 2022 and that should support gold over the medium term. “said Sugandha Sachdeva, vice president of commodities and currency research. at Religare Broking.

Meanwhile, the Omicron variant of the coronavirus has sparked fears about the pace of the economic recovery, weighing on risk sentiment globally.

Spot silver fell 0.3% to $ 22.32 an ounce.

Platinum rose 0.2% to $ 939.34 and palladium gained 1.6% to $ 1,809.56. (Reporting by Nakul Iyer and Arundhati Sarkar in Bengaluru; edited by Uttaresh.V)

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