Gold companies on slightly weaker dollar, fears of a rate hike cap gains

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Gold prices rose on Tuesday as

the dollar slipped, but the metal languished near a 2.5-year low

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on the outlook for further rate hikes by the US Federal Reserve

tame galloping inflation.

Spot gold rose 0.4% to $1,628.78 an ounce, in

0315 GMT, after hitting its lowest level since April 2020 at $1,620.20

In Monday. U.S. gold futures edged up 0.2% to

$1,636.30.

The dollar index fell 0.1%, slowing in two decades

peak reached during the previous session. The benchmark 10-year Treasury

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the yield was also slightly below a 12-year high marked on

Monday.

Slightly lower US yields and the dollar may have provided some

possibility that gold prices will stabilize after its recent sell-off,

said Yeap Jun Rong, IG market strategist.

« The prevailing upside risk to inflation and, therefore,

tightening of monetary policy, remains a major obstacle

limit gold’s upside,” he said.

Fed officials brought rising volatility under control on Monday by

global markets and said their priority remained controlling

inflation.

The price of gold has fallen more than 20% since surpassing

the key $2,000 level in March as rapid US rate hikes

non-performing bullion is less attractive and has also pushed the dollar up

to multi-year highs.

« Its status (of gold) as a safe-haven asset in times of economic crisis

distress failed to stem the selling tide,” analysts from

ANZ said in a note.

Indicative of investor sentiment, SPDR Gold holdings

Trust, the largest gold-backed stock exchange in the world

fund, fell to 30,333,443 ounces on Monday, its lowest since

March 2020.

Spot silver rose 0.6% to $18.45 an ounce, platinum

fell 0.2% to $850.46 and palladium edged down 0.1%

less than $2,044.99.

(Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi

Aish and Subhranshu Sahu)