Spot gold edged lower on Wednesday, with the impact of a stronger dollar outweighing a slight swell in the metal’s safe-haven appeal after attacks on an airport and a rush-hour metro train in Brussels.
Overnight news of attacks in Brussels, and hawkish comments from another US Federal Reserve official have underpinned the US currency, while a rising US rate path has dampened gold’s investment appeal.
“Particularly in the US, this slow normalisation of the economy should result in a grind higher in real interest rates and cap the attractiveness of precious metals as an investment,’’ BMI Research said in a note.
Higher interest rates increase the holding costs of gold, which is a non-interest bearing asset. ‘
Easter holidays
Spot gold had slipped 0.4 per cent to $1,243.60 an ounce by 0208 GMT, with trade expected to wind down ahead of the Easter holidays which start on Friday.
Prices have been trading in a narrowing band of $1,240-$1,270 for the past week.
US gold also slipped 0.4 per cent to $1244.20.
Venezuela gold exports
Venezuela exported about 443 million Swiss francs ($456 million) worth of gold to Switzerland in February, data showed on Tuesday, as the South American country’s central bank carried out swaps to receive cash due to a biting economic crisis.
The arrest of an Iranian gold trader whom Turkish prosecutors placed at the heart of a Turkish government graft scandal two years ago hit the shares in a state-run bank on Tuesday and raised opposition hopes that new light would be shed on a case it said was covered up.
Switzerland became a net importer of platinum once again in February, data from the Swiss customs bureau showed on Tuesday, as shipments from major producer South Africa ticked up.
Platinum was trading down 0.2 per cent at $986.50, while palladium dropped 0.8 per cent to $598.48 an ounce.