Gold flat as firm dollar, US rate-hike outlook dent appeal

GOLD prices were flat on Tuesday (Oct 11), pinned near a one-week low hit in the previous session, as a firmer dollar and the prospect of further oversized rate hikes by the US Federal Reserve sapped the zero-yielding asset's appeal.

Spot gold was flat at US$1,668.29 per ounce, as of 1.43 am GMT. Prices fell 1.6 per cent on Monday, their biggest one-day percentage decline since Sep 23.

US gold futures rose 0.3 per cent to US$1,679.60 per ounce.

The dollar index was up 0.2 per cent, making the greenback-priced bullion more expensive for those holding other currencies.

The US central bank is clear on the need for restrictive monetary policy to lower inflation, Fed vice chair Lael Brainard said on Monday, but the path and pace of rate increases will remain "data-dependent" as the central bank monitors the economy and the evolution of domestic and global risks.

After a stronger-than-expected US labour data focus in now on inflation reading, due on Thursday, which is expected to remain stubbornly high.

While gold is considered a hedge against inflation and economic uncertainties, rising interest rates reduce the appeal for the asset, which pays no interest.

World Bank president David Malpass and International Monetary Fund managing director Kristalina Georgieva warned on Monday of a growing risk of global recession and said inflation remained a continuing problem after Russia's invasion of Ukraine.

Spot silver fell 0.4 per cent to US$19.57 per ounce, platinum dipped 0.1 per cent to US$897.50 and palladium rose 0.2 per cent to US$2,176.00. REUTERS

KEYWORDS IN THIS ARTICLE

READ MORE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes