Precious: Gold faces first weekly loss in four on dwindling rate cut bets

Rise Gold

15/03/2024 14:33

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      Gold down 0.6% for the week 
    

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      Traders price in about 56% chance of June rate cut 
    

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      Silver and platinum up 4% so far weekly, palladium at 6%
    

  
 (Updates as of 1417 GMT)
    By Anjana Anil
       March 15 (Reuters) - Gold prices held steady on Friday
as they looked set to log their first weekly drop in four as
investor hopes of a U.S. interest rate cut in June took a hit
after data over the week showed bubbling price pressures.
    Spot gold  XAU=  was little changed at $2,163.10 per ounce,
as of 10:17 a.m. EDT (1417 GMT). Bullion was headed for a weekly
drop of 0.6%, its first since mid-February after hitting a
record high of $2,194.99 last week.
    U.S. gold futures  GCcv1  were also flat at $2,167.40.
    Data this week showed that U.S. consumer prices increased
above expectations in February and producer prices also showed
some stickiness in inflation.
    "Gold has already priced in whatever positive boost it would
get from expectations that interest rates are going down... if
inflation starts to kick higher again, it means that
policymakers are going to have to keep monetary policy more
restrictive for longer," said Everett Millman, chief market
analyst at Gainesville Coins.
    "Although gold does not particularly like a high interest
rate environment, if the reasons for interest rates to stay that
high is because inflation is running hot... that naturally means
people will again turn to gold," Millman added.
    Higher-than-expected inflation keeps more pressure on the
Fed to keep interest rates elevated, weighing on gold. The
precious metal is also used as a hedge against inflation.
    Traders continue to bet on interest rate cuts in June,
although chances of rates easing in June are now seen at 56%,
compared with 72% before the CPI data, CME FedWatch Tool showed.
    The U.S. dollar index  .DXY  headed for its largest weekly
gain since mid-January. A firmer dollar makes gold more
expensive for holders of other currencies.
    Spot platinum  XPT=  rose 1.8% to $944.19 per ounce,
palladium  XPD=  gained 1.4% to $1,083.93, while silver  XAG= 
was up 2% at $25.30. All three metals were poised to post a
weekly gain.

 (Reporting by Anjana Anil in Bengaluru; Editing by Nick Macfie)
 ((Anjana.Anil@thomsonreuters.com;))