Gold edged higher on Thursday as US bond yields pulled back slightly and Federal Reserve minutes hinted a less aggressive rate-hike stance, though a firmer dollar kept the metal’s gains in check.
Spot gold was up 0.2% at $1,764.75 per ounce, as of 3.17am GMT, after falling to a two-week low of $1,753.97 in the previous session. US gold futures gained 0.1% to $1,778.50 per ounce.
Benchmark US 10-year treasury yields edged lower to 2.8731% after hitting a near one-month high of 2.9190% in the previous session. Lower yields reduce the opportunity cost of holding non-interest bearing gold.
Meanwhile, the dollar hovered near a three-week high hit earlier this week, making gold more expensive for buyers holding other currencies.
“Gold might continue to struggle in the near-term now that the US dollar is perking up again,” said Matt Simpson, a senior market analyst at City Index. “It’s trading in a tight range today, but near yesterday’s post-FOMC (Federal Open Market Committee) lows, so downside risks remain in place in today’s European and US sessions.”
The minutes of Fed’s July meeting showed that the central bank was contemplating paring back the pace of future rate hikes in line with a slowdown in inflation, but saw “little evidence” yet that pressures were easing. Traders are now pricing in about a 63.5% chance of a 50-basis-point (bps) rate hike by the Fed in September and a 36.5% chance of a 75 bps increase.
Gold prices have fallen more than $300, or nearly 15%, since scaling above the key $2,000 per ounce mark in early March due to the Fed’s rapid rate hikes to tame inflationary pressures. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange traded fund (ETF), fell 0.32% to 989.01 tonnes on Wednesday.
Spot silver fell 0.9% to $19.65 per ounce, platinum eased 0.4% to $920.03 and palladium was steady at $2,139.78.
Reuters
