Gold prices inched lower on Thursday as the U.S. dollar firmed, while easing concerns about the global banking system slowed safe-haven flows into bullion.

FUNDAMENTALS
Spot gold was down 0.2% at $1,960.68 per ounce, as of 0103 GMT. U.S. gold futures fell 0.3% to $1,962.10.

The dollar index was 0.1% higher, making bullion less affordable for buyers holding other currencies.

Market participants are awaiting U.S. Personal Consumption Expenditures data, the Federal Reserve‘s preferred inflation measure, for further clues about the Fed‘s monetary policy. The data is due on Friday.

The Fed will make its interest rate decisions from here on a meeting-to-meeting basis and will take financial conditions into account in that judgment alongside other factors, Fed Vice Chair for Supervision Michael Barr said on Wednesday.

Barr also said the scope of blame for Silicon Valley Bank‘s failure stretches across bank executives, Fed supervisors and other regulators.
Markets see a 41.2% chance of the Fed raising interest rates by 25 basis points in May, according to the CME FedWatch tool.
The opportunity cost of holding non-yielding gold rises when interest rates are increased to bring down inflation.

Falling energy prices will lower headline inflation towards the Bank of England‘s (BoE) 2% target, but persistent underlying inflation will make it hard for the BoE to set monetary policy as the year progresses, BoE monetary policy committee member Catherine Mann said on Wednesday.

Spot silver fell 0.3% to $23.29 per ounce, platinum slipped 0.5% to $962.88 and palladium edged down 0.2% to $1,436.85