Gold prices weaker in Asia as investors look for more data on Fed views

Category: Commodities

Gold prices eased in Asia on Monday as investors awaited further data cues on the roadmap for U.S. interest rates.Gold for April delivery on the Comex division of the New York Mercantile Exchange fell 0.32% to $1,219.40 a troy ounce.Silver futures for March delivery were up 0.24% at $14.720 a troy ounce, while copper futures were flat at $2,118 a pound.Last week, copper futures gained strongly as China hinted at easier monetary policy. The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.In the week ahead, investors will be looking to Friday’s U.S. nonfarm patrols report for fresh indications on the strength of the labor market.Investors will also be focusing on surveys of manufacturing and service sector activity in both the U.S. and China.Last week, gold prices fell sharply on Friday, as upbeat U.S. data boosted optimism over the strength of the economy and supported the case for higher interest rates, sending the dollar broadly higher.Gold’s losses came as the U.S. dollar strengthened broadly after data showed the U.S. economy grew at an annual rate of 1.0% in the three months to December, up from an initial estimate of 0.7% growth. Economists had expected fourth quarter GDP growth to be revised down to 0.4%.Separate reports, showing personal spending, inflation and consumer sentiment all rose in January added to the view that the U.S. recovery is on track.The likelihood of a June rate hike by the Federal Reserve jumped to 32.2% from 19.7% prior to the upbeat data, according to CME Group’s FedWatch site. Any rate hikes this year are viewed as bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments.A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.