Khaberni - Gold prices edged up slightly on Tuesday, supported by a weak dollar, but are heading to record their worst monthly performance in more than 17 years, after the rise in energy prices led to a reduction in hopes for a cut in US interest rates this year.
The spot gold price climbed 0.8% to $4544.19 per ounce.
U.S. gold futures for April delivery rose 0.3% to $4573.20. The dollar declined, making commodities priced in it less expensive for holders of other currencies. Gold has lost about 14% since the beginning of this month, heading towards its biggest decrease since October 2008, under pressure from a rising dollar. However, prices have risen about 5% so far this quarter.
Traders have almost completely ruled out any possibility of the Federal Reserve (the central bank of the U.S.) cutting interest rates this year, as rising energy prices threaten to feed inflation more broadly. Before the outbreak of the war in the Middle East, there were expectations for two interest rate cuts in the U.S. this year.
Benchmark oil prices continued their gains to record the largest monthly increase ever amid escalating conflict in the Middle East, raising concerns about supplies.
Federal Reserve Chairman Jerome Powell said on Monday that the central bank can wait to see how the war with Iran will affect the economy and inflation, indicating that policymakers usually ignore shocks such as those caused by rising oil prices.
