NNA – Gold prices slipped to a more than three-month low on Wednesday after upbeat U.S. economic data cemented expectations of more rate hikes this year as investors positioned for a speech by Federal Reserve Chair Jerome Powellrsquo;s later in the day.
Spot gold fell 0.4% to $1,906.49 per ounce by 1148 GMT, hitting its lowest since mid-March earlier in the session. U.S. gold futures shed 0.4% to $1,915.50.
ldquo;Good U.S. economic data remains a headwind for the yellow metal, as it likely keeps Fed officials reiterating a hawkish tone,rdquo; UBS analyst Giovanni Staunovo said.
U.S. consumer confidence increased in June to the highest level in nearly 1-1/2 years amid renewed labour market optimism, while business spending appeared to hold up in May, indicating the economy remained on a solid footing despite fears of a recession.
Investorsrsquo; focus has shifted to Powellrsquo;s speech at an afternoon policy panel before a European Central Bank Forum in Portugal. The U.S. central bank signalled this month that borrowing costs may still need to rise by as much as half a percentage point by the end of this year.
ldquo;(But) we still expect at some point the aggressive monetary policy tightening to weaken U.S. economic data and result in a change of tone by the Fed,rdquo; Staunovo added.
High interest rates discourage traders from investing in non-yielding gold.
ldquo;Wersquo;ve seen increasing signs that the U.S. may evade an outright recession … Our forecasts see gold falling closer to $1,850 levels this year based on this assumption and that interest rates might stay higher for slightly longer than the market was expecting,rdquo; Harshal Barot, senior consultant at Metals Focus, said.
The dollar index rose 0.2%, making gold less attractive for overseas buyers.
Silver fell 1% to $22.65 per ounce, platinum shed 1.1% to a four-month low at $914.45, and palladium dropped 3.7% to $1,248.27, its lowest in 4-1/2 years. (Reporting by Arundhati Sarkar and Seher Dareen in Bengaluru; editing by John Stonestreet, Jason Neely and David Evans) — Reutersnbsp;
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