Gold slips as Turkish central bank chief's ouster raises dollar's appeal
- Spot gold fell 0.3% to $1,739.80 per ounce by 0052 GMT. US gold futures were down 0.2% at $1,738.80 per ounce.
Gold prices fell on Monday as Turkey replacing its central bank governor with a high interest rate critic led to investors flocking towards the safety of the dollar, on fears that the move would threaten other financial markets.
FUNDAMENTALS
Spot gold fell 0.3% to $1,739.80 per ounce by 0052 GMT. US gold futures were down 0.2% at $1,738.80 per ounce.
President Tayyip Erdogan, on Saturday, unexpectedly fired Turkey's central bank chief, Naci Agbal, replacing him with a former ruling party legislator and opponent of tight monetary policy, Sahap Kavcioglu.
Concerns that developments in Turkey would threaten other financial markets strengthened the dollar, making gold expensive for non-US investors.
Meanwhile, Federal Reserve Chair Jerome Powell, told Wall Street Journal the United States would pull out of the crisis "stronger and better, as we have done so often before."
Also, big US banks will have to resume holding an extra layer of loss-absorbing capital against US Treasuries and central bank deposits from next month after the Fed said on Friday it would not extend a temporary pandemic regulatory break due to expire this month.
Last week, yields spiked on the longer end of the curve, fuelled by the Fed policy meeting, boosting economic growth expectations for 2021.
Higher yields lift the opportunity cost of holding non-yielding bullion.
Hedge funds and money managers raised their bullish positions in COMEX gold and cut them in silver contracts in the week to March 16, the US Commodity Futures Trading Commission (CFTC) said on Friday.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.3% to 1,051.78 tonnes on Friday from 1,048.28 tonnes on Thursday.
Palladium rose 0.2 % to $2,641.18, Silver fell 1.2% to $25.92 and platinum was down 1.3% at $1,181.28.
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