Gold prices fell on Thursday, dragged down by a rise in US Treasury yields and higher expectations of an aggressive rate hike by the Federal Reserve in March.
* By 1749 GMT , spot gold was down 0.2% at $1,803.70 an ounce, after rising 1% earlier in the session. US gold futures lost 0.2% to $1,806.30.
* U.S. Treasury yields rose on Thursday after a Bank of England rate hike led investors to expect similar moves from the Federal Reserve as central banks battle persistent inflation. high.
* European Central Bank President Christine Lagarde acknowledged Thursday that euro zone inflation was higher than expected and risks were tilted to the upside, but continued to forecast it would ease this year.
* Investors are now awaiting nonfarm payrolls figures on Friday, after Wednesday’s ADP data showed US private payrolls unexpectedly fell last month.
* “Payroll data would be important to get confirmation of a weakening labor market, which is a key factor for the Fed to go slow on its rate hike plans,” said Soni Kumari, commodity strategist at ANZ . “We see inflation numbers and geopolitical tension driving gold prices in the near term.”
* US Federal Reserve officials have signaled they will start raising interest rates next month to combat high inflation.
* The Bank of England raised interest rates to 0.5% on Thursday, with nearly half of its policymakers favoring a higher rise to contain runaway price pressures, and the central bank warned that inflation will soon exceed 7%.
* Gold is considered a hedge against inflation, but rate hikes would make bullion, which does not pay interest, less attractive.
* Among other precious metals, silver fell 1.3% to $22.32 an ounce, platinum fell 0.8% to $1,024.73 and palladium sank 3.1% to $2,296.23.