PRECIOUS-Gold edges lower as higher energy prices dim rate‑cut hopes
By Noel John
March 16 (Reuters) - Gold edged lower on Monday, weighed down by waning hopes of near‑term U.S. interest‑rate cuts due to elevated energy prices, while a softer dollar helped limit losses.
Spot gold XAU= was down 0.2% at $5,007.58 per ounce, as of 0240 GMT. U.S. gold futures GCcv1 for April delivery fell 1% to $5,011.10.
The dollar nudged lower, making greenback-priced commodities such as bullion cheaper for holders of other currencies. USD/
The U.S. 10‑year Treasury yields US10YT=RR eased, increasing the appeal of non-yielding bullion.
"If higher energy prices push inflation higher and the Fed stays cautious about cutting rates, that could keep real yields elevated, which tends to be a headwind for gold," said Christopher Wong, a strategist at OCBC.
Oil remained above $100 a barrel as the U.S.-Israeli war against Iran entered a third week, putting oil infrastructure at risk and keeping the Strait of Hormuz shut in the biggest disruption to global supplies ever. O/R
Higher crude prices feed into inflation by raising transportation and production costs. Gold is considered an inflation hedge, but high interest rates make yield-bearing assets more attractive, weighing on its appeal.
"In the near term, (gold's) price action may remain choppy as markets reassess the Fed policy path and the trajectory of real yields," Wong said.
The U.S. Federal Reserve is widely expected to hold interest rates steady for a second straight meeting when it gives its policy statement on Wednesday.
Meanwhile, U.S. President Donald Trump said on Sunday his administration is talking to seven countries about helping to secure the Strait of Hormuz.
Trump threatened more strikes on Iran's main oil export hub, Kharg Island, over the weekend and said he was not ready to reach a deal to end the war.
Trump insisted that nations relying heavily on oil from the Gulf have a responsibility to protect the strait.
Spot silver XAG= fell 1.2% to $79.57 per ounce. Spot platinum XPT= gained 0.8% to $2,042.98 and palladium XPD= rose 1% to $1,566.91.
