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Gold ticks lower after U.S. Fed chief reaffirms inflation fight

Thursday,   23-Jun-2022   07:59 AM (IST)

Gold prices were a touch lower on Thursday, with some support from a weaker dollar and U.S. Treasury yields, after the Federal Reserve's head said the central bank was fully committed to reining in inflation, and would try not to spark a recession in the process. Spot gold was down 0.1% at $1,835.88 per ounce by 0109 GMT. U.S. gold futures also inched 0.1% lower to $1,837.30. The Fed is not trying to engineer a recession to stop inflation but is fully committed to bringing prices under control even if doing so risks an economic downturn, the central bank chief Jerome Powell said on Wednesday. Powell is due to testify again in Washington D.C. later on Thursday. Gold is often viewed as a hedge against inflation and a safe store of value during economic crises, like a recession. However, the Fed hiking interest rates to fight inflation raises the opportunity cost of holding bullion, which yields no interest. The dollar edged down, supporting demand for greenback-priced bullion among buyers holding other currencies. Benchmark U.S. 10-year Treasury yields also eased, making gold more appealing. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.19% to 1,071.77 tonnes on Wednesday from 1,073.80 tonnes on Tuesday. Spot silver dipped 0.1% to $21.38 per ounce, platinum was steady at $926.33, and palladium firmed 0.1% to $1,865.17.