Gold prices edge lower

LONDON: Gold prices edged lower on Wednesday after US Federal Reserve chief Janet Yellen hinted at a hike in interest rates in an upcoming meeting of the central bank. Spot gold fell 0.2 percent to $1,225.96 per ounce at 0530 GMT, while US gold futures rose 0.1 percent to $1,227. “The focus is really on the US fiscal policy. And if that stokes up the inflation expectations, we expect gold to suffer and consolidate for a while,” said Richard Xu, a fund manager at China’s



biggest gold exchange-traded fund, HuaAn Gold.

Xu added, however, that the fund still expects “gold will pick up momentum in the second half of the year.”

Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion and boost the dollar. However, the underlying demand for bullion is still strong owing to critical uncertainties, said  analyst Daniel Hynes.