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PRECIOUS-Gold falls on swift economic recovery hopes; Fed minutes eyed
Published at 07/04/2021 at 13:16

* U.S. Fed meeting minutes due at 1800 GMT

* U.S. job openings rose to 2-year high in February

* Euro zone business activity returns to growth in March

(Updates prices)

By Sumita Layek

April 7 (Reuters) - Gold prices fell on Wednesday as robust economic data from the United States lifted expectations of a rapid recovery and dampened bullion's appeal, while investors were waiting for minutes from the Federal Reserve's last policy meeting.

Spot gold fell 0.5% to $1,734.20 per ounce by 1158 GMT. U.S. gold futures slipped 0.4% to $1,735.80 per ounce.

Strong U.S. economic data is raising fears that central bank tapering can arrive sooner than expected, said ActivTrades chief analyst Carlo Alberto De Casa.

Expectations are rising that accelerating U.S. economic growth and inflation could force the Fed to abandon its pledge to keep interest rates near zero until 2024.

Non-yielding gold is highly sensitive to rising rates, as they raise the opportunity cost of holding bullion and support dollar and bond yields.

Market participants are waiting for the release of minutes from the U.S. Federal Reserve's March 16-17 policy meeting at 1800 GMT.

Data on Tuesday showed U.S. job openings rose to a two-year high in February while hiring picked up on strengthening domestic demand amid increased COVID-19 vaccinations and additional pandemic aid from the government.

Euro zone business activity also returned to growth last month, underpinned by a record expansion in the manufacturing sector.

The International Monetary Fund, meanwhile, raised its outlook for global economic growth. nL1N2LZ22A]

However, safe-haven gold can still remain supported as "things are not so good in Europe. Vaccinations are well behind and are progressing very slowly and we are still in midst of a third (coronavirus) wave," said Commerzbank analyst Carsten Fritsch.

Central banks across the globe, in particular the European Central Bank and the Federal Reserve, want to see higher growth and inflation numbers before they think about changing monetary policy, he added.

Among other precious metals, silver fell 1% to $24.91 per ounce, palladium fell 2.1% to $2,629.20, while platinum eased 0.5% to $1,226.82.

(Reporting by Sumita Layek in Bengaluru; Editing by Kirsten Donovan and Bernadette Baum)

((Sumita.Layek@thomsonreuters.com; Within U.S. +1 646 223 8780, Outside U.S. +91 8061822693; Reuters Messaging: Sumita.Layek.thomsonreuters.com@reuters.net))