Gold Price Analysis – PRECIOUS-Gold prices ease as Fed signals quicker-than-expected rate hikes

Sept 23 (Reuters) – Gold prices dipped on Thursday after the U.S. Federal Reserve signalled easing its monthly bond purchases by next year and a sooner-than-expected interest rate hike, which could increase the opportunity cost of holding the non-yielding bullion.

FUNDAMENTALS

* Spot gold was down 0.3% at $1,762.33 per ounce, as of 0122 GMT, while U.S. gold futures slipped 0.9% to $1,762.10.

* In its policy statement on Wednesday, the U.S. central bank said it could start paring bond purchases as soon as November and that half of the Fed officials were ready to raise interest rates next year in response to inflation.

* Gold is often considered a hedge against higher inflation, but a Fed rate hike would dull bullion’s appeal.

* The dollar index hit a one-month high, diminishing gold’s appeal for those holding other currencies.

* Fears of imminent contagion from China Evergrande’s debt crisis were temporarily soothed on Wednesday after the property developer agreed to settle interest payments on a domestic bond, while the Chinese central bank injected cash into the banking system.

* Russia produced 173.99 tonnes of gold between January and July, down from the 176.30 tonnes it produced in the same period in 2020, the finance ministry said on Wednesday.

* Silver fell 0.5% to $22.55 per ounce.

* Palladium eased 0.1% to $2,020.96, but prices rose 6.2% on Wednesday, their biggest one-day gain since March 2020.

* Platinum dropped 0.4% to $993.13.

DATA/EVENTS (GMT) 0645 France Business Climate Mfg Sept 0715 France Markit Mfg, Serv, Comp Flash PMIs Sept 0730 Germany Markit Mfg, Serv, Comp Flash PMIs Sept 0800 EU Markit Mfg, Serv, Comp Flash PMIs Sept 0830 UK Flash Mfg, Serv, Comp PMIs Sept 1100 UK BOE Bank Rate Sept 1100 UK GB BOE QE Corp Sept 1230 US Initial Jobless Clm Weekly 1345 US Markit Mfg, Serv, Comp Flash PMIs Sept 1600 Federal Reserve issues quarterly financial accounts of the United States