Gold Pares Losses After Fed Officials Signal April Rate Increase

Gold rose slightly, paring losses that followed Federal Reserve signals that an interest rate increase could happen as soon as next month, which would reduce the appeal of the metal as an alternative asset.

Bullion for immediate delivery was 0.2 percent higher at $1,246.18 an ounce by 11:32 a.m. in Singapore, from $1,243.75 on Monday when it fell 0.9 percent, according to Bloomberg generic pricing. Gold is 1.3 percent lower over the past four days.

Gold’s rally this year, which has made it the best performing major commodity, is being stymied as the dollar recovers from a near nine-month low. On Monday, Atlanta Fed President Dennis Lockhart and San Francisco Fed chief John Williams said that recent economic data may justify additional tightening. The Federal Open Market Committee, which raised rates in December for the first time in almost a decade, next meets on April 26-27.

“The U.S. macro data is quite good, justifying rate hikes,” Helen Lau, an analyst at Argonaut Securities (Asia) Ltd. in Hong Kong, said by e-mail. “As this expectation gathers consensus, then gold will be under pressure.”

• Holdings in Exchange -traded funds backed by gold rose 0.2 percent to 1,766 metric tons on Monday, the highest since March 2014, according to data compiled by Bloomberg.
• Bullion of 99.99 percent purity added 0.3 percent to 260.40 yuan a gram ($1,247.92 an ounce) on the Shanghai Gold Exchange.
• Spot silver rose 0.2 percent, palladium slipped 0.3 percent and platinum lost 0.2 percent.

To contact the reporter on this story: Ranjeetha Pakiam in Singapore at rpakiam@bloomberg.net. To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net, Rebecca Keenan

By: Ranjeetha Pakiam

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