admin
Gold steadied on Wednesday, buoyed by weakness in the dollar, although caution prevailed in the run-up to US inflation readings that could set the tone for future monetary policy.
Spot gold was up 0,1 percent at US$1 925.69 per ounce by 1010 GMT, having dropped to its lowest since July 10 at US$1 922 on Tuesday. US gold futures remained unchanged at US$1 959.80.
Gold held a tight range, caught between support from central banks’ buy-on-dip interest and the prospect of higher real rates as inflation cools, Bank of China International analyst Xiao Fu said.
“The centre of attention is on whether the U.S. Federal Reserve wants to do another rate hike in September or later this year.”
Barring any abrupt change in the direction of economic data, the Fed could leave interest rates where they are, Philadelphia Fed President Patrick Harker said on Tuesday.
Data showed China’s consumer sector fell into deflation in July, with the Chinese central bank’s stronger than expected exchange-rate fixing also weighing on the US dollar.
Gold, which is usually seen as a hedge against economic risks, was also supported by renewed worries about the health of the world’s largest economy after ratings agency Moody’s downgraded several US lenders.
Longer-dated US Treasury yields fell in response, making non-interest-bearing bullion more attractive.
“For a sustained recovery (in gold), we believe the market will need to see increased certainty on 2024 U.S. rate cuts,” said Baden Moore, head of carbon and commodity strategy at National Australia Bank, adding U.S. CPI data on Thursday was in focus along with China stimulus.
Among other metals, spot silver edged down 0,1 percent to US$22,73 an ounce, platinum dropped 0,8 percent to US$892,84, and palladium fell 0,6 percent to US$1 212.37. (Reporting by Deep Vakil and Swati Verma in Bengaluru; editing by Barbara Lewis. – Reuters
Online Reporter