Precious: Gold slips after Powell reiterates aggressive tightening plan

Polymetal International PK

23/06/2022 18:06

* Dollar index  .DXY  up 0.3%
    * Weekly jobless claims fall 2,000 to 229,000
    * Silver bars pile up at Russia's Polymetal
    * U.S Treasury yields tumble to two-week lows 

 (Adds comments, updates details and prices)
    By Ashitha Shivaprasad
    June 23 (Reuters) - Gold gave up initial gains and edged
lower on Thursday as the dollar regained momentum after U.S.
Federal Chairman Jerome Powell reiterated more aggressive
monetary tightening to tame inflation, even as economic risks
mount. 
    Spot gold  XAU=  fell 0.3% to $1,831.72 per ounce by 12:31
p.m. ET (1631 GMT). U.S. gold futures  GCv1  inched 0.2% lower
to $1,834.70.
    After Powell said the Fed's commitment to curbing inflation
was 'unconditional', the dollar index  .DXY  resumed its uptick,
dimming gold's appeal, especially among overseas buyers.
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    While gold is considered a hedge against inflation and
economic uncertainties, rising interest rates reduce appeal for
the asset, which pays no interest.
    The gold and silver markets were also being weighed down by
expectations that the overall economic slowdown could also
hamper demand for the metals, although "gold's safe haven status
is limiting the downside," said Jim Wyckoff, senior analyst at
Kitco Metals.
    Meanwhile, U.S. yields fell to their lowest in almost two
weeks, while fears about an economic slowdown continued to
mount, further hurt by Powell's indication that the Fed's fight
against inflation may come at the cost of rising
unemployment. US/  
    Investors also took stock of data showing a dip in U.S.
weekly jobless claims last week as labor market conditions
remained tight, though some slowing is emerging. Meanwhile, U.S.
business activity slowed considerably in June, a survey showed.
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    Bank of China International analyst Xiao Fu said while gold
will attract buying due to recession risks, the rising rates are
very powerful in terms of impacting asset classes, including
gold. 
    Spot silver  XAG=  fell 0.9% to $21.20 per ounce, platinum
 XPT=  was down 1.4% at $913.33. Palladium  XPD=  fell 0.9% to
$1,847.30.
    

 (Reporting by Ashitha Shivaprasad and Arundhati Sarkar in
Bengaluru; editing by David Evans and Shinjini Ganguli)
 ((Ashitha.Shivaprasad@thomsonreuters.com;))