Gold rises off one-month low; firm dollar, hawkish Fed cap gains

Synopsis

Gold prices saw a slight increase on Thursday after hitting a one-month low. However, a strong dollar and the Federal Reserve's hawkish stance limited further gains. Oil prices surged above $110 a barrel following an attack on Iranian energy facilities. This has raised inflation concerns. The US and Canada central banks held rates steady but warned of persistent inflation risks.

Gold prices inched higher on Thursday after briefly touching a more than one-month low, but gains were capped by a firm dollar and the Federal Reserve's hawkish stance, which has limited hopes for near-term rate cuts.

FUNDAMENTALS

* Spot gold added 0.4% to $4,838.39 per ounce as of 0115 GMT, rebounding after ‌hitting its ⁠lowest ⁠since February 6 earlier in the day. Prices fell 3.7% on Wednesday.

* U.S. gold futures for April delivery shed 1.1% to $4,839.90.

* The dollar firmed, making greenback-priced bullion more expensive for holders of other currencies.

* Oil prices climbed above $110 a barrel after Iran attacked several energy facilities across the Middle East following a strike on its South ⁠Pars gas ‌field, adding fresh inflation concerns.

* The closure of the Strait of Hormuz kept crude elevated, raising transport and manufacturing ⁠costs. While rising inflation backdrop typically boostsgold's appeal as a hedge, high interest rates reduce demand for the non-yielding metal.

* The U.S. Federal Reserve and Bank of Canada both struck hawkish tones on Wednesday as surging energy prices arising from the Iran conflict clouded the inflation outlook.

* Both central banksheld rates steady, but warned of risks that rising energy costs ‌could fan a more persistent inflation spike.

* Meanwhile, U.S. President Donald Trump's administration is considering deploying thousands of U.S. troops to reinforce operations in the ⁠Middle East.

* Spot gold has fallen more than 9% since the U.S.-Israeli strike on Iran on February 28, pressured by a stronger dollar, which has emerged as one of the clearest "safe-haven" winners.

* Spot silver gained 0.5% to $75.74 per ounce. Spot platinum rose 0.9% at $2,040.46 and palladium added 0.9% to $1,488.75.

DATA/EVENTS (GMT)

1230 US Initial Jobless Clm 14 Mar,

1230 US Philly Fed Business Indx Mar

1230 US New Home Sales-Units Jan

1200 UK BOE Bank Rate Mar -- Japan JP BOJ rate Decision 19 Mar.

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