Spot gold was flat at $1,711.00 an ounce at 0248 GMT. US gold futures fell 0.1% to $1,708.80.
The dollar eased for a fourth straight session, although it remained at high levels, making gold bullion at the price of the greenback cheaper for buyers holding other currencies. [USD/]
Benchmark yields on 10-year US Treasury have risen, reducing the appeal of non-yielding bullion. [US/]
Gold appears to be a special case, not participating in a broader relief rally on a weaker dollar, said Stephen Innes, managing partner at SPI Asset Management, adding that central banks’ early rate hikes are clearly tarnishing the situation. lure of bullion.
European Central Bank (ECB) policymakers plan to raise rates by 50 basis points, more than expected, at their meeting on Thursday in a bid to rein in record inflation, two sources with direct knowledge told Reuters. the discussion.
As the dollar reacts to a (perhaps) more aggressive rate hike by the ECB, gold is not enjoying the rebound one would normally expect from a weaker greenback, Innes said.
Although gold is considered a hedge against inflation, rising interest rates and bond yields increase the opportunity cost of holding bullion, which earns no interest.
On Wednesday, Australia’s main central banker said a steady pace of interest rate hikes was needed to prevent a damaging inflationary cycle from developing.
Meanwhile, Asian stocks extended a global rally on Wednesday as strong US corporate earnings and an expected resumption of Russian gas supplies to Europe helped lift sentiment and ease fears of a recession. [MKTS/GLOB].
Spot silver firmed 0.2% to $18.77 an ounce, platinum rose 0.5% to $879.02 and palladium climbed 1% to $1,895.17.