Gold eases but remains on course for quarterly rise

Production of gold at Krastsvetmet precious metals plant in Krasnoyarsk
Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk
  • Key U.S. inflation gauge slightly below expectations
  • All precious metals set to gain in March

March 31 (Reuters) - Gold prices were on track for a second straight quarterly rise on Friday, as growing bets that the U.S. Federal Reserve will slow the pace of interest rate hikes drew investors to the metal.

Spot gold was down 0.6% at $1,968.25 per ounce by 2:26 p.m. EDT (1826 GMT), after prices moved as much as 0.4% higher following data that showed U.S. consumer spending rose modestly in February. U.S. gold futures settled down 0.6% at $1,986.2.

"Gold jumped quickly but modestly after the market-friendly PCE (personal consumption expenditures) report," said Tai Wong, an independent metals trader based in New York.

"Bulls want a very strong close, ideally above $2,000, for quarter-end as a springboard to challenge the $2,070 all-time record, but the yellow metal looks a little tired."

The dollar index , while down for the quarter, firmed on Friday, weighing on demand for the greenback-priced gold.

Global stocks gained after the U.S. data, latching onto hopes for a less challenging Fed interest rate regime. Gold, seen as a safe haven, loses value when investors have an appetite for riskier assets.

Last week, gold topped $2,000 after the sudden collapse of two U.S. regional lenders drove bets that the U.S. central bank might pause interest rate hikes to stem the risk of contagion in the global banking system.

Prices retreated after authorities initiated rescue measures, though they have gained about 7.8% so far this quarter.

gold quarterly move

"The mini-banking crisis has seen yields fall considerably and interest rate expectations pared significantly back, which has propelled gold higher," said Craig Erlam, senior market analyst at OANDA.

Gold consumption in top hub China slowed this week as a steady rise in domestic prices started to bite, forcing dealers to offer discounts for the first time in months.

Spot silver rose 0.4% to $23.96 per ounce, platinum added 0.6% at $991.77, and palladium was largely unchanged at $1,464.77.

Reporting by Bharat Govind Gautam, Ashitha Shivaprasad and Deep Vakil in Bengaluru; Editing by Jan Harvey, Krishna Chandra Eluri and Shilpi Majumdar

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Reports on global commodities and energy markets, with a special focus on oil and gas infrastructure and the power sector. Alongside agriculture, metals, and dry bulk, his coverage also spans U.S. energy regulations, extreme weather events, and the transition to renewables. Contact: 917483271897