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Gold inches lower on steady dollar, with focus on banking risks

27 March 2023 09:20 (UTC +04:00)

Gold prices edged down for a second straight session on Monday as the U.S. dollar firmed, while authorities attempted to assuage investor fears of a widespread crisis in the global banking sector, APA reports citing Reuters.

Spot gold was down 0.1% at $1,975.59 per ounce, as of 0350 GMT. U.S. gold futures fell 0.3% to $1,977.90.

The dollar index was largely steady and made bullion less affordable for overseas buyers.

"Markets continue to adopt a cautious stance... On net, the mix of growth worries, lingering concerns of banking stresses could benefit safe-haven proxies such as USD, JPY and gold in the interim," said OCBC FX strategist Christopher Wong.

Markets are pricing in a nearly 90% chance of the Fed standing pat on interest rates at its May meeting, according to the CME FedWatch tool.

While gold is considered a hedge against inflation and economic uncertainties, higher interest rates tend to discourage investment in non-yielding bullion.

Spot silver fell 0.6% to $23.08 per ounce, platinum was 0.2% lower at $974.60 and palladium slipped 0.7% to $1,405.48.