Sapiente enim aperia

Recasts, adds comment, graphic and updates prices, as of 0415 GMT

By Harshit Verma

Jan 17 (Reuters) – Gold prices extended losses on Wednesday as the U.S. dollar strengthened after hawkish comments from a Federal Reserve official dampened expectations for a March interest rate cut, while traders awaited comments from more Fed speakers this week.

Spot gold XAU= was down 0.2% at $2,023.49 per ounce, as of 0415 GMT, after stooping 1.3% in the previous session – its biggest single-day decline since Dec. 4, 2023.

U.S. gold futures GCcv1 also fell 0.2% to $2,026.90.

Flow of funds to the U.S. dollar have been a key driver impacting the gold price, said Michael Langford, chief investment officer at Scorpion Minerals Ltd, forecasting bullion to trade around $2,000/Oz in the near term.

The dollar index .DXY rose 0.1%, making bullion more expensive for other currency holders. It shot up to a more than one-month high on Tuesday after Fed Governor Christopher Waller said that the U.S. central bank should not rush to lower interest rates until lower inflation can clearly be sustained. USD/

Waller’s comments triggered a broad sell-off, pulling all three major U.S. stock indexes lower, while the benchmark U.S. Treasury yields logged their biggest daily move upwards in more than three months on Tuesday. MKTS/GLOB .N US/

With geopolitical tensions escalating, safe-haven flows could provide a floor for the gold price. However, “the short-term fate of the gold price is likely in the hands of the bond market,” Tim Waterer, chief market analyst at KCM Trade, wrote in a note.

Traders are pricing in an about 65% chance of a rate cut by the U.S. central bank in March, down from about 75% probability seen on Tuesday morning, according to the CME FedWatch tool.

Spot silver XAG= fell 0.4% to $22.81 per ounce.

Platinum XPT= declined 0.3% to $892.37 and palladium XPD= slipped 0.2% to $934.44. As the sister metals approach price parity, the rate at which platinum is displacing palladium in the manufacture of autocatalysts is slowing, a trend which is likely to persist through this year.

(Reporting by Harshit Verma in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)

((Harshit.Verma@thomsonreuters.com;))