By Arundhati Sarkar
June 23 (Reuters) – Gold traded lower on Thursday as a strengthening dollar and Federal Reserve Chairman Jerome Powell’s remarks on the U.S. central bank’s commitment to reining in price rises reduced its appeal as a refuge.
* By 1056 GMT, spot gold was down 0.4% at $1,829.89 per ounce, and US gold futures were down 0.4% at $1,830.70.
* Although the precious metal is considered a hedge against inflation and economic instability, it also competes with the dollar as a store of value. Therefore, a stronger greenback makes bullion more expensive for foreign buyers.
* Gold is expected to face gradual downward pressure and move towards $1,800 as Powell reiterates the rate hike path and the dollar strengthens, said Xiao Fu, an analyst at Bank of China International.
* “As gold is a haven asset, it will attract buying on demand (recession risk), but the rate hike is very powerful in terms of the impact on other asset classes, including gold,” he said.
* Rising rates in the US raise the opportunity cost of holding non-interest bearing bullion.
* In other precious metals, spot silver was down 1% at $21.17 an ounce; platinum was down 0.7% at $920.06; and palladium was up 0.3% at $1,869.70.
(Edited in Spanish by Carlos Serrano)