Gold dips amid rate hike concerns after US inflation data ‎release

Gold prices fell today, Wednesday, with the rise of the dollar, after data showed that inflation rose in the United States last month at the slowest pace since late 2021, which increased investor concerns about the Federal Reserve (the US central bank) continuing to tighten monetary policy.

According to Reuters, gold prices in the spot market fell 0.5 percent to $1,845.96 an ounce by 0538 GMT, after falling to their lowest since early January on Tuesday. And gold futures contracts in the United States lost 0.5 percent, to $ 1856.60.

High interest rates discourage investors from putting their money in non-returnable assets such as gold

“Any further tightening of monetary policy is likely to affect gold for the foreseeable future,” said Matt Simson, senior market analyst at (City Index).

He added, “However, with the slowdown in the downward momentum in the market and the closing of gold stable (yesterday, Tuesday), despite the rise in inflation, the path may face fewer resistance points (heading towards) a slight rise from current levels.”

The consumer price index in the United States rose 0.5 percent last month, in line with expectations. In the 12 months through January, the index rose 6.4 percent, the smallest increase since October 2021, but slightly higher than expected.

US central officials said on Tuesday that the bank needs to continue to gradually increase interest rates to overcome inflation.

The dollar index rose 0.2 percent, making gold denominated in the US currency more expensive for holders of other currencies.

Silver prices in the spot market fell 0.5 percent to $21.74 an ounce, platinum lost 0.4 percent, recording $927.06, and palladium fell 0.2 percent to $1493.76, after hitting its lowest level since August 2019 in the last session.