(Bloomberg) — Gold held its hefty decline in the previous session, as hot US economic data further dented hopes the Federal Reserve will rapidly pivot to monetary easing.
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Bullion was trading below $2,300 an ounce in early Asia hours after ending Tuesday 2.1% lower, as investors focused on a print that showed an acceleration in a broad gauge of US labor costs in the first quarter. The report reinforced pessimism that the Federal Open Market Committee will strike a more hawkish tone in its rates decision announcement later Wednesday.
Swaps markets show only one rate cut is now fully priced in for 2024 — that’s down from the three that the Fed said in December it was aiming for. Higher rates are typically negative for the non-yielding precious metal.
Elsewhere, an index of the US dollar jumped the most in more than two weeks on Tuesday. A stronger greenback makes bullion more expensive for most buyers.
The precious metal is still up more than 10% this year amid robust demand from Asian markets — especially China — and conflicts in Ukraine and the Middle East. Demand from central banks posted its strongest start to any year on record during the first quarter, the World Gold Council said Tuesday.
Spot gold was little changed at $2,287.82 an ounce at 11:19 a.m. in Singapore, which had a public holiday along with many other nations in Asia. The Bloomberg Dollar Spot Index was up 0.1%, after notching a 0.6% gain on Tuesday. Silver was steady, while palladium and platinum fell.
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