Gold Under Pressure Amid Hawkish Fed Rate Hike Outlook

Investing.com – Gold prices edged lower on Thursday, after the Federal Reserve left interest rates unchanged but hinted at hikes later this year.

Comex were a touch lower at $1,343.10 a troy ounce by 3:15AM ET (0815GMT).

At Fed Chair Janet Yellen’s last policy meeting as head of the central bank, the Fed announced it was , a move that was widely expected, but said inflation is likely to rise this year.

Those comments signaled that borrowing costs will continue to climb under incoming central bank chief Jerome Powell.

The majority of economists believe that the U.S. central bank will hike rates in March, followed by another hike in June, with a third move higher arriving in December.

Gold is highly sensitive to rising rates, which increase the opportunity cost of holding nonyielding bullion.

The , which tracks the U.S. currency against six rivals, was a shade higher at 89.05, remaining above last week’s low of 88.25, its weakest level since December 2014.

Treasury yields pushed higher, with the benchmark running up to the highest level in almost four years at around 2.75%.

Besides the Fed, there is a batch of data on today’s economic calendar, including weekly jobless claims figures and a report on fourth-quarter productivity and labor costs at 8:30AM ET (1330GMT). There is also manufacturing PMI at 9:45AM ET (1445GMT) and both ISM manufacturing data and construction data at 10AM ET (1500GMT).

Investors are also looking ahead to Friday’s U.S. nonfarm payrolls report.

In other metals action, were steady at $17.24 a troy ounce.

prices inched down 0.3% to $1,020.80 an ounce.

Sister metal meanwhile lost 0.6% at $997.90.

March was little changed at $3.195 a pound.

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