PRECIOUS-Gold at over one-year peak as weak US data buoys demand

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Gold hits highest since March 2022

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U.S. dollar index declines

(Recasts, adds comments, details, and updates prices)

By Kavya Guduru

April 5 (Reuters) – Gold prices edged higher on
Wednesday to touch their highest levels since March 2022 after
weak U.S. economic data spurred safe-haven demand and
expectations that the Federal Reserve might loosen its monetary
policy trajectory.

Spot gold was up 0.1% at $2,022.09 per ounce, as of
0355 GMT. Earlier in the session, bullion was closing in on
record highs seen in 2020. U.S. gold futures were steady
at $2,038.90.

The dollar index hovered near two-month lows, making
bullion cheaper for buyers holding other currencies. [USD/]

“Gold could continue to tear to the upside,” given a slowing
global economy with high inflation, with the weakness in the
U.S. dollar allowing gold to “leap higher,” said Clifford
Bennett, chief economist at ACY Securities.

Gold prices rallied 2% to cross $2,000 per ounce on Tuesday
after another round of weaker U.S. economic data pointed to a
slowing economy.

Data showed U.S. job openings in February dropped to the
lowest level in nearly two years, suggesting the labour market
was cooling. A separate report showed new orders for
U.S.-manufactured goods fell for a second straight month in
February.

Gold is traditionally considered a hedge against inflation
and economic uncertainties, but higher interest rates dim the
appeal for non-yielding bullion.

Metals firm MKS PAMP, in a note, flagged a higher risk of
future bank failures and weaker economic activity as credit
availability and financial conditions tighten amidst a sticky
inflation backdrop, which are “positive gold drivers”.

The Fed is seen done raising interest rates and starting to
cut them in the summer.

But Federal Reserve Bank of Cleveland President Loretta
Mester said while the economy appears on a path toward slowing
down, the U.S. central bank likely has more rate hikes ahead of
it.

Spot silver edged up 0.1% to $25.03 per ounce, while
platinum gained 0.5% to $1,022.58 and palladium
rose 0.3% to $1,461.42.

Trade was thinned by holidays in China and Hong Kong.

(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry
Jacob-Phillips)
((Kavya.Guduru@thomsonreuters.com;))

Keywords: GLOBAL PRECIOUS/ (UPDATE 1)

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