Gold inches higher, hovers near 2-month lows on rate-hike jitters
Gold prices edged up on Monday as the dollar eased, but hovered near their lowest levels since late December after U.S. economic data last week raised worries that the Federal Reserve could hike interest rates further.
Spot gold was up 0.1% at $1,813.30 per ounce, as of 0056 GMT. U.S. gold futures firmed 0.2% to $1,819.90.
The dollar index eased 0.1%, making bullion less expensive for buyers holding other currencies.
Data on Friday showed consumer spending, which accounts for more than two-thirds of U.S. economic activity, shot up 1.8% last month – the largest increase since March 2021.
The personal consumption expenditures (PCE) price index rose 0.6% last month, after gaining 0.2% in December.
U.S. Treasury Secretary Janet Yellen told Reuters on Saturday that the data showing inflation jumped unexpectedly in January signals that the fight against inflation “is not a straight line” and more work is needed.
“It’s going to take more effort on the part of the Fed to get inflation on that sustainable downward path to 2%,” Cleveland Fed President Loretta Mester said on Friday.
While bullion is seen as an inflation hedge, rate hikes dent its appeal.
Money markets expect the Fed’s target rate to peak at 5.397% in July, from a current range of 4.50% to 4.75%.
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