Economic news

Gold Flat as Dollar Strength Counters Safe-Haven Demand

  • SHFE closed from Feb. 9-16 for Lunar New Year holidays
  • Israel attacks Rafah city after rejecting Hamas truce proposal
  • Palladium will be the harder hit due to limited uses - ANZ
  • Gold loses 0.3% so far this week

Feb 9 (Reuters) - Gold prices were flat on Friday, with China markets closed for the Lunar New Year break, while a firmer U.S. dollar countered safe-haven demand fuelled by Middle East tensions.

Spot gold held its ground at $2,032.70 per ounce, as of 0755 GMT. Bullion has declined 0.3% so far in the week.

U.S. gold futures were flat at $2,048.40 per ounce.

China's Shanghai Futures Exchange is closed from Feb. 9 until Feb. 16 for the Lunar New Year holidays.

"Some stress in U.S. regional banks, Chinese new year demand and Middle East tensions put a floor on the metal," Hugo Pascal, a precious metals trader at InProved, said.

Concerns lingered about the Middle East as Israeli forces bombed areas in the southern border city of Rafah after Prime Minister Benjamin Netanyahu rejected a Hamas truce proposal.

The dollar index and 10-year Treasury yield were both set for a weekly rise.

Focus will shift next week to a U.S. consumer price index report after Federal Reserve officials said they would hold off on cutting interest rates until they had more confidence that inflation was headed down to 2%.

Traders have pared bets for a May interest rate cut in the U.S.

Spot palladium prices fell below those of sister metal platinum for the first time since April 2018 on Thursday.

Palladium prices fell 0.1% to $886.40 per ounce, while platinum rose 0.3% to $887.44.

"Challenging supply backdrop, heavy platinum loadings and substitution away from palladium are boding well for platinum," analysts at ANZ Research wrote in a note.

Both metals are used in making a key component in internal combustion engines, but platinum is also used in jewellery and other industries.

Spot silver rose 0.5% to $22.68 per ounce.

Reporting by Harshit Verma in Bengaluru; Editing by Subhranshu Sahu, Mrigank Dhaniwala and Sherry Jacob-Phillips

Source: Reuters

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