Gold Bounces Off 5-Week Low as Dollar Gains on Fed Hike View

Gold Bounces Off 5-Week Low as Dollar Gains on Fed Hike View

Prices of gold have fallen to their lowest level in a month on Monday, pressured by stronger dollar after the hawkish comments from Federal Reserve officials suggesting at least two interest rate hikes this year, with the first potentially next month following. In addition to data they showed US Consumer spending increased in line with market expectations in February, while the core PCE prices were below forecasts.

Gold for June delivery on the Comex division of the New York Exchange dipped $2.20, or 0.18%, to trade at $1,221.30 a troy ounce.

Spot gold was down 0.5 percent at $1,209.85 an ounce. It touched a session-low of $1,208.90, its cheapest since February 23.

DOC said personal spending rose 0.1% last month, with expectations, while consumer spending January was revised down to a gain of 0.1% from an increase previously 0.5% reported.

Consumer spending is the main source of US economic growth, accounting for as much as two-thirds of economic activity.

Meanwhile, the core PCE price index rose 0.1% last month, below expectations for a gain of 0.2%. The core PCE price index rose at an annualized rate of 1.7%, missing estimates of 1.8%.

It marked more losses bullion fell the most since November last week as the dollar gained strength on the outlook for rates higher US interest in the short term.

St. Louis, James Bullard, president of the Fed was the latest to add his voice to politicians support a rate hike, possibly as early as the next policy meeting in April.

But Bullard also said he was uncertainly about whether to push for a rate increase in April, partly because the US central bank We have seen some more economic data in the meantime.

Gold for delivery in April dropped Rs 225, or 0.79%, to Rs 28,374 per 10 grams at the Multi Commodity Exchange as speculators cut down their bets.

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