Investing.com - Gold prices were trading lower on Thursday, weighed down from fresh gains in the dollar as it traded near a one-week high against a basket of major currencies.
Gold futures for April delivery on the Comex division of the New York Mercantile Exchange fell $5.7, or 0.43%, to $1,331.60 a troy ounce by 10:45m ET.
The dollar extended its recovery and rose to an over one-week peak on Thursday, as the Federal Reserve’s latest comment solidified expectations of interest rate hike ahead after showing a more upbeat take on inflation and increasing confidence that economic growth would pick up steam. Fed policy makers would next meet on 20 March.
Both the dollar and U.S. treasury yields rose after the Fed minutes.
The US dollar index was quoted at 90.01 at 10:45pm ET, up 0.01% after climbing as high as 90.166 earlier today, as the Fed’s positive tone pushed the dollar higher this morning to break the 90 handle from a three-year low near 88.25.
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to interest-bearing assets such as bonds.
Asian equities traded lower on Thursday following the U.S. stocks’ negative reaction to the Fed minutes, with Shanghai Composite and Shenzhen Component being the exceptions as they came back online from a week-long holiday and both gaining almost 2 percent in mid-morning trade.