Gold flat after sharp declines on U.S. data

6 בדצמ׳ 202200:35 UTC

GOLD

DXY

GLD

XAGUSD1!

Gold prices were little changed in early Asian trade on Tuesday, after falling more than 1.5% in the previous session as the U.S. dollar rebounded on bets that strong economic data may prompt bigger interest rate hikes by the Federal Reserve.

FUNDAMENTALS

* Spot gold GOLD was flat at $1,768.61 per ounce, as of 0011 GMT. Bullion hit a five-month high on Monday before closing 1.6% lower in its biggest daily drop since Sept. 23.

* U.S. gold futures GOLD were little changed at $1,780.90.

* The dollar index DXY rebounded on Monday after data showed U.S. services industry activity unexpectedly picked up in November, prompting speculation the Fed may lift interest rates more than recently projected.

* Higher interest rates tend to weigh on gold's appeal as they increase the opportunity cost of holding the non-yielding metal.

* Meanwhile, the European Central Bank is likely to raise interest rates by 50 basis points next week, governing council member Gabriel Makhlouf said on Monday.

* SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.2% to 903.46 tonnes on Monday.

* Top bullion consumer China is set to announce a further easing of some of the world's toughest COVID curbs as early as Wednesday, sources said, as investors cheered the prospect of a policy shift that follows widespread protests and mounting economic damage.

* Spot silver XAGUSD1! inched 0.1% lower to $22.23, platinum PL1! was flat at $997.84 and palladium XPDUSD1! rose 0.2% to $1,878.93.