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Gold Down, Near Three Week Low as Investors Prepare for Fed Rate Hikes

Published 10/01/2022, 04:58
© Reuters.

By Gina Lee

Investing.com – Gold was down on Monday morning in Asia, remaining near a three-week low as investors digest the latest U.S. jobs report and now turn their attention to inflation data.

Gold futures were down 0.35% to $1,791.05 by 10:51 PM ET (3:51 AM GMT) after hitting its lowest since Dec. 16, or $1,782.10, on Friday.

U.S. Treasury yields surged last week following a hawkish U.S. Federal Reserve Stance in the minutes from its December 2021 meeting.

The U.S. job report for December, released on Friday, showed that non-farm payrolls were at a lower-than-expected 199,000, while the unemployment rate was a lower-than-expected 3.9%.

Investors now await inflation data, including the consumer price index, due later in the week. Meanwhile, China will also release its consumer and producer price indexes on Wednesday.

Fed funds futures have already priced an almost 90% chance of a Fed interest rate hike in March 2022 and a more than 90% chance of another one by June. The central bank could also speed up its asset tapering program.

Investors now await comments from a slew of Fed officials throughout the week, including Atlanta Fed President Raphael Bostic, Kansas City Fed President Esther George, St. Louis Fed President James Bullard, Richmond Fed President Thomas Barkin, Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans, and New York Fed President John Williams.

Rising U.S.-Russia tensions over Ukraine are also on the radar, with talks indicating that the two sides are far from reaching an agreement and increasing the risk of armed confrontation.

Rising retail appetite for physical gold prompted Indian dealers to charge premiums in the past week, while the upcoming Lunar New Year holiday brightened the sales outlook in Singapore.

In other precious metals, silver was flat at $22.29 an ounce, platinum inched up 0.1% and palladium was down 0.3%.

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