Gold firms as dollar softens, but rate-hike fears limit gains
Gold prices edged higher on Monday on a softer dollar, although central banks worldwide retained their aggressive monetary policies to tackle soaring inflation, limiting gains for safe-haven bullion.
Fundamentals
Spot gold was up 0.3% at $1,665.29 per ounce, as of 0115 GMT.
U.S. gold futures ticked 0.1% higher to $1,673.30.
The dollar index was down 0.2%, making greenback-denominated gold less expensive for overseas buyers.
Fed policymakers have been resolute in raising interest rates despite a turmoil in global financial markets.
Fed Vice Chair Lael Brainard on Friday added her full endorsement of the U.S. central bank’s higher-for-longer game plan for interest rates to curb inflation.
Rising interest rates dim bullion’s appeal as they increase the opportunity cost of holding the non-yielding asset.
Euro zone inflation zoomed past forecasts to hit 10% in September, a new record high that will reinforce expectations for another jumbo interest rate hike next month from the European Central Bank.
The physical gold market in India flipped to a premium last week as demand improved ahead of festivities, while Chinese premiums stayed elevated.
India, the world’s second-biggest consumer of gold, slashed the base import prices of the metal on Friday.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.15% to 939.70 tons on Friday.
COMEX gold speculators increased net short position by 8,333 contracts to 41,300 in week ended Sept. 27, the U.S. Commodity Futures Trading Commission said on Friday.
Spot silver rose 0.7% to $19.12 per ounce, platinum was 0.3% higher at $861.50 and palladium was up 0.5% at $2,167.75.
