Gold futures snapped a three-day winning streak and ended lower on Thursday as the dollar firmed against its major counterparts, and bond yields rose on concerns U.S. interest rates could stay higher for longer.
The dollar index climbed to 105.18, gaining nearly 0.7%.
Gold futures for April ended lower by $4.90 or about 0.3% at 1,840.50 an ounce.
Silver futures for May drifted down $0.194 to settle at $20.901 an ounce, while Copper futures for May ended down $0.0840 at $4.0760 per pound.
The dollar climbed, as Atlanta Fed President Raphael Bostic said on Wednesday that the Fed needs to lift funds rate to between 5% and 5.25% and keep there “well into 2024” in order to bring inflation under control.
Minneapolis Fed President Neel Kashkari also called for higher rates, adding he is “open-minded” on either a 25- basis point or a 50-basis point rate hike at the U.S. central bank’s next meeting in March.
In economic news today, data released by the Labor Department showed initial jobless claims edged down to 190,000 in the week ended February 25th, a decrease of 2,000 from the previous week’s unrevised level of 192,000. Economists had expected jobless claims to inch up to 195,000.
“The economy is still looking robust and that should keep the Fed’s hawkish speak going. Rates will undoubtedly be higher for longer, but the risks of larger than quarter-point rises may be back on the table. Yesterday, Fed’s Kashkari said he is open minded to either a 25 or 50 bps rate rise, but focused on the dot plots, which he will lean towards further rate hikes. All eyes will be on Powell’s semi-annual monetary policy report to Congress,” says Edward Moya, Senior Market Analyst, OANDA.
Moya says “gold’s got a few big events coming up that will determine its fate. The ISM Services index could provide some insight if the economy will come back to reality following a very robust January.”
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