GOLD SLIPS TO TWO-MONTH LOWS

GOLD prices slipped to a more than two-month trough yesterday as the dollar rallied on expectations of an aggressive monetary policy tightening by the US Federal Reserve (Fed).

Spot gold price dropped 0.8 percent to $1 889.84 (about R29 758) an ounce by 4.34pm. Prices earlier retreated to $1 881.45 an ounce, its lowest level since February 24.

US gold futures were 0.8 percent lower at $1 888.70 an ounce.

“There’s a flight to safety right now out of other currencies into US dollar... Gold is going to struggle to rally between now and the Fed meeting,” said Bob Haberkron, RJO Futures senior market strategist.

The dollar index charged to its highest level since January 2017, fuelled by expectations that the US central bank will be more hawkish than peers and safe-haven flows fanned by concerns over slowing growth in China and Europe.

The Fed is expected to increase rates by 50 basis points at its May 3-4 policy meeting.

Rising US interest rates increased the opportunity cost of holding non-yielding gold, while also boosting the dollar, in which it is priced. The greenback is also seen as a rival safe-haven asset to gold during economic and political crises.

“While the yellow metal’s prices have remained extremely resilient against an aggressively hawkish Fed, as a protracted war in Ukraine simultaneously raised both geopolitical uncertainty and inflation risks and thereby fuelled demand for havens, we see few participants left with appetite to buy gold,” analysts at TD Securities said in a note.

In other metals, spot silver price dipped 0.3 percent to $23.42 an ounce, having earlier touched a low since February 15.

Platinum price eased 0.1 percent to $920.62 an ounce and palladium climbed 0.9 percent to $2 206.39 an ounce. I Reuters