Gold eases off 2-month peak as US dollar rises

[BENGALURU] Gold prices slipped from a more than 2-month peak on Wednesday (Nov 10), as an uptick in the dollar hurt the bullion's appeal.

Spot gold fell 0.2 per cent to US$1,827.05 per ounce by 2.55 am GMT, after hitting its highest since Sep 3 earlier in the session.

US gold futures edged 0.1 per cent lower to US$1,829.70.

The dollar index edged up 0.1 per cent, raising gold's cost to buyers holding other currencies.

Two of the US central bank's most dovish policymakers said Tuesday (Nov 10) they expect to get more clarity on the post-pandemic economic outlook by next summer, when the Federal Reserve is expected to finish winding down its asset purchases.

The Federal Reserve looks at a wide range of indicators in gauging how close the economy is to reaching full employment, Fed Chair Jerome Powell said.

Euro zone inflation is likely to fall back below 2 per cent late next year but the European Central Bank should prepare for a less benign scenario, avoiding long policy commitments as upside risks dominate, Dutch policymaker Klaas Knot said.

Easy monetary policy to spur economic growth amid the pandemic have propelled gold prices to new highs over the last 2 years, as near-zero interest rates cut the opportunity cost of holding non-yielding bullion.

US producer prices increased solidly in October, driven by surging costs for petrol and motor vehicle retailing, suggesting that high inflation could persist for a while amid tight global supply chains related to the pandemic.

China's factory gate prices rose at their fastest pace in 26 years in October, beating forecasts and further squeezing profit margins for producers already grappling with soaring coal prices and other commodity costs due to a power crunch.

Spot silver fell 0.1 per cent to US$24.25 per ounce. Platinum eased 0.6 per cent to US$1,052.68, while palladium rose 0.4 per cent to US$2,027.97.

REUTERS