PRECIOUS-Gold subdued on strong dollar, yields; hawkish Fed clouds outlook

Reuters

Warning: This material has been prepared by a third party company, Reuters, which is independent of Davy. Davy has not reviewed the material and accepts no responsibility for errors or omissions, or for the information or opinions contained therein. It does not constitute investment advice.

        * 
      Fed lifts target interest rate to 3.00%-3.25% range
    

        * 
      U.S. weekly jobless claims rise 
    

        * 
      10-year U.S. Treasury yields hit 11-year high
    

  
 (Updates prices)
    By Kavya Guduru
       Sept 22 (Reuters) - Gold prices edged lower in choppy
trading on Thursday, pressured by a stronger dollar and higher
Treasury yields, while the U.S. Federal Reserve's hawkish policy
stance clouded the outlook for the non-yielding bullion.
    Spot gold  XAU=  was down 0.2% at $1,671.20 per ounce by
1:46 p.m. EDT (1746 GMT), after shedding more than 1% earlier in
the session.
        U.S. gold futures  GCv1  settled 0.3% higher at
$1,681.10.
  
    "(Gold's) weakness is coming because the dollar's stronger
(and) yields are a little higher... the overall outlook for the
Fed is more rate hikes, which is going to put a limit on gold,"
said Bob Haberkorn, senior market strategist at RJO Futures.
    The dollar  .DXY  gained 0.5%, making greenback-priced
bullion more expensive for overseas buyers. Benchmark 10-year
U.S. Treasury yields  US10YT=RR  hit an 11-year high.  USD/ 
 US/ 
    "Overall, the trend will continue to be negative for gold as
the Federal Reserve told us yesterday that they're quite
determined to increase rates," said Bart Melek, head of
commodity strategy at TD Securities.
    The U.S. central bank, as widely expected, hiked its
benchmark overnight interest rate by 75 basis points on
Wednesday, and projected the policy rate would rise to the
4.25%-4.50% range by the end of 2022, and to a range of
4.50%-4.75% by the end of 2023.  urn:newsml:reuters.com:*:nL1N30R1F1
    Interest rate hikes to fight soaring inflation tend to raise
the opportunity cost of holding zero-yield bullion.
    "That, ultimately, gets gold below $1,600 - probably in the
not too distant future," Melek added.
    Investors also took stock of U.S. data showing initial
claims for state unemployment benefits rose to 213,000 versus
expectations for 218,000 applications for the latest week.
 urn:newsml:reuters.com:*:nL1N30S1TX
        In other metals, spot silver  XAG=  was unchanged at
$19.58 per ounce, platinum  XPT=  lost 0.8% to $900.68, while
palladium  XPD=  added 0.6% to $2,166.82.
  
 (Reporting by Kavya Guduru in Bengaluru; Editing by Paul Simao
and Shailesh Kuber)
 ((Kavya.Guduru@thomsonreuters.com;))

Warning: This content may be provided by regulated and unregulated entities and is not created, reviewed or endorsed by Davy. It is provided for general information purposes only and does not constitute a recommendation or solicitation to purchase or sell any security or make any other type of investment or investment decision. Importantly, it does not constitute investment advice, as it does not contemplate the personal circumstances of any particular person or group of persons. Neither Davy nor the providers of the Third Party Content will be liable for any investment decision made based on the reliance on or use of such data, or any liability that may arise due to delays or interruptions in the delivery of the Third Party Content for any reason.