Gold Dips On Rate-hike Worries

Gold prices eased on Tuesday, bond yields continued to rise and the dollar hovered near a four-and-a-half-year high against the yen after Jerome Powell was re-nominated for another term as chair of Federal Reserve.

Spot gold dipped 0.4 percent to $1,797.55 per ounce, while U.S. gold futures were down half a percent at $1,797.20.

If Fed Governor Lael Brainard had been nominated for the top Fed position, many expected more dovish monetary policy.

Powell has been supportive of taking action to help fight soaring inflation. His nomination provided a little bit more legitimacy to market pricing in terms of policy tightening next year.

Traders also ramped up their bets on an ECB rate hike next year after ECB policymaker Francois Villeroy de Galhau, said on Monday that the central bank is "serious" about ending its emergency bond-buying program in March and may not need to expand regular asset purchases to cover the shortfall.

Separately, board member Isabel Schnabel said today that the risks to inflation are skewed to the upside and that plans to end pandemic emergency bond buys remain valid.

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