Gold steady as tepid U.S. dollar counters rate-hike woes
Gold prices were steady on Tuesday as the dollar faltered, although risks from looming aggressive interest hikes by the U.S. Federal Reserve limited gains in zero-yielding bullion.
Fundamentals Spot gold held its ground at $1,651.75 per ounce, as of 0118 GMT.
U.S. gold futures were down 0.3% at $1,658.30.
The dollar index was flat in Asian hours, having fallen 1% overnight, while benchmark U.S. 10-year Treasury yields
also eased.
Inflation in the United States is “very stubborn” and the Federal Reserve should “stay the course” and tighten monetary policy or else lose credibility, said Gita Gopinath, the International Monetary Fund’s first deputy managing director.
A fourth straight 75-basis-point Fed interest rate hike is expected next month after data last week showed inflation increasing strongly in September.
Gold is highly sensitive to rising U.S. rates, which increase the opportunity cost of holding the non-yielding asset.
The German government is aiming to cushion an expected recession with its investment programs, but without fueling inflation, Economy Minister Robert Habeck said on Monday.
Holdings of SPDR Gold Trust
, the world’s largest gold-backed exchange-traded fund, fell 0.22% to 939.10 tons on Monday.
Spot silver rose 0.1% to $18.71 per ounce, platinum was 0.3% higher at $918.00 and palladium gained 0.4% to $2,008.97.
