Gold flat as firm dollar, U.S. rate hike dent appeal

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Gold prices were flat on Friday as

the dollar held close to its recent peak while the likelihood of

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more aggressive interest rate hikes by the U.S. Federal Reserve

also weighed on the appeal for non-yielding bullion.

FUNDAMENTALS

* Spot gold was flat at $1,671.60 per ounce by 0107

GMT. U.S. gold futures ticked 0.1% higher to $1,682.80.

* The dollar index was down 0.1%, but not far from a

20-year peak scaled on Thursday in the wake of a 75-basis-point

rate hike by the U.S. central bank and its hawkish outlook.

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* Rising rates dull bullion’s appeal since it yields no

interest. Gold prices have fallen nearly 20% since scaling above

the key $2,000 per ounce mark in March.

* Many central banks raised their interest rates this week,

following the U.S. Federal Reserve in the fight against

inflation, which has been sending shockwaves through financial

markets and the economy.

* Euro zone inflation is set to go higher and price growth

likely to be more persistent than earlier thought, European

Central Bank board member Isabel Schnabel said on Thursday,

defending the ECB’s plans to raise rates further.

* The number of Americans filing new claims for unemployment

benefits increased moderately last week, indicating the labor

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market remains tight despite the Fed’s attempt to cool demand

with aggressive rate hikes.

* Holdings of SPDR Gold Trust , the world’s largest

gold-backed exchange-traded fund, fell 0.21% to 950.13 tonnes on

Thursday from 952.16 tonnes on Wednesday.

* Spot silver was flat at $19.64 per ounce, platinum

rose 0.3% to $903.22, while palladium dipped 0.2%

to $2,165.10.

DATA/EVENTS (GMT)

0715 France S&P Global PMI Flash Sept

0730 Germany S&P Global PMI Flash Sept

0800 EU S&P Global PMI Flash Sept

0830 UK Flash PMI Sept

1345 US S&P Global PMI Flash Sept

1800 Federal Reserve Chair Jerome Powell gives opening

remarks at the “Fed Listens: Transitioning to the Post

pandemic Economy” event in Washington

(Reporting by Eileen Soreng in Bengaluru; Editing by Sherry

Jacob-Phillips)