Gold firms on Fed slowdown hopes, latest Russia jitters

GOLD prices steadied near a three-month peak on Wednesday (Nov 16) as signs of cooling US inflation boosted bets for smaller rate hikes, while reports around Russian missiles killing two people in Poland led to some demand for safe-haven assets.

Spot gold held its ground at US$1,776.50 per ounce, as of 0103 GMT, after hitting its highest since Aug 15 in the previous session.

US gold futures rose 0.2 per cent at US$1,780.40 per ounce.

The United States and Western allies said they were investigating but could not confirm a report on Tuesday that a blast in Nato member Poland resulted from stray Russian missiles, while Russia’s defence ministry denied it.

The US producer price index (PPI) increased 8.0 per cent for the 12 months through October compared with economist expectations for 8.3 per cent and September’s 8.4 per cent increase, according to the Labor Department data.

The data, following last week’s smaller-than-expected increase in consumer prices for October, encouraged investors who have been closely monitoring inflation data for signs that the Federal Reserve could slow its interest rate hikes.

Rising interest rates tend to dull bullion’s appeal as the metal pays no interest.

Atlanta Fed president Raphael Bostic said on Tuesday he sees little evidence that aggressive monetary policy tightening is slowing inflation, anticipating that more hikes would be needed to get inflation down to the Fed’s 2 per cent target.

But, safe-haven gains for the dollar limited greenback-priced gold’s advance as the US unit rose 0.2 per cent against its rivals.

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Gold hovers near 3-month high on hopes of smaller Fed hikes

Spot silver eased 0.2 per cent to US$21.48 per ounce. Platinum fell 0.3 per cent to US$1,011 and palladium was flat at US$2,097. REUTERS