July 8 (Reuters) – Gold eased on Wednesday to its lowest level in nearly a week, as U.S. strikes on Iran boosted oil prices and the dollar, raising concerns that inflation could keep interest rates higher for longer and weigh on non-yielding bullion.
FUNDAMENTALS
* Spot gold fell 0.1% to $4,100.32 per ounce by 0107 GMT, after dropping to its lowest since July 2 earlier in the day. U.S. gold futures for August delivery shed 1.1% to $4,112.50.
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* U.S. oil prices jumped nearly 3% in early trade, extending the previous session’s gains, while the U.S. dollar clung to its highest levels of the week against most of its peers.
* Markets have increased their bets for a September Federal Reserve rate hike to over 67% chance, up from about 57% on Tuesday, the CME FedWatch tool showed. FEDWATCH/
* Investors also awaited minutes of the Federal Open Market Committee’s June 16-17 meeting, due later on Wednesday, for fresh clues on the interest rate path under new Fed Chair Kevin Warsh.
* While gold is seen as an inflation hedge, high interest rates tend to weigh on the non-yielding asset.
* Hong Kong launched a central clearing system for gold on Tuesday and revived dollar gold futures trading. It is also looking at introducing yuan-denominated gold futures as it seeks to become a regional reserve hub for the precious metal.
* Elsewhere, spot silver fell 0.3% to $59.82 per ounce, platinum slipped 1.2% to $1,620.38 and palladium dropped 1.6% to $1,256.25.
Reporting by Swati Verma in Bengaluru; Editing by Subhranshu Sahu
Our Standards: The Thomson Reuters Trust Principles.
Source: Original Article
