PRECIOUS-Gold edges higher on softer dollar; banking optimism limits appeal

March 28 (Reuters) – Gold prices edged up on Tuesday as the U.S. dollar eased, although an improvement in risk appetite after efforts by regulators to contain worries over the global banking system limited the safe-haven metal’s appeal .

FUNDAMENTALS

* Spot gold XAU= was up 0.1% at $1,958.85 per ounce, as of 0048 GMT. U.S. gold futures GCv1 rose 0.3% to $1,959.30.

* The dollar index =USD eased 0.1%, making bullion more affordable for buyers holding other currencies. USD/

* Gold prices slipped more than 1% on Monday as investors scaled back on safe-haven trading in favour of riskier assets after First Citizens BancShares said it would take on the deposits and loans of failed Silicon Valley Bank. MKTS/GLOB

* Bank of England Governor Andrew Bailey signalled on Monday that interest rate-setters would focus on fighting inflation and would not be swayed unduly by worries about the health of the global banking system.

* The U.S. Federal Reserve is “still learning” how much impact its interest rate increases have had on the economy and inflation, Federal Reserve Governor Philip Jefferson said on Monday.

* Markets are pricing in a nearly 60% chance of the Fed standing pat on interest rates in its May meeting, according to the CME FedWatch tool.

* Higher interest rates tend to discourage investment in non-yielding bullion.

* Spot silver XAG= edged 0.1% higher to $23.11 per ounce, platinum XPT= rose 0.4% to $975.13 and palladium XPD= was up 0.5% at $1,414.99.

DATA/EVENTS (GMT)

0645 France Business Climate Mfg March

0645 France Business Climate Overall March

1400 US Consumer Confidence March

Bank of Japan Governor Haruhiko Kuroda gives remark at the FIN/SUM 2023 in Tokyo

1315 – European Central Bank president Christine Lagarde gives speech at opening ceremony of BIS Innovation Hub Eurosystem Centre in Frankfurt

0845 – Governor Andrew Bailey and other Bank of England officials participate in a Treasury Select Committee hearing on Silicon Valley Bank in London

(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips)

((Kavya.Guduru@thomsonreuters.com;))

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