Gold gains as dollar, yields retreat after Fed minutes

GOLD prices rose on Thursday (Aug 18), as the dollar and Treasury yields pulled back slightly after US Federal Reserve minutes hinted policymakers may be less aggressive on future rate hikes.

Spot gold was up 0.3 per cent at US$1,765.89 per ounce, as of 12.55 am GMT, after falling to a 2-week low of US$1,753.97 in the previous session.

US gold futures gained 0.2 per cent to US$1,780 per ounce.

The dollar slipped 0.1 per cent against its rivals, making gold less expensive for buyers holding other currencies.

Benchmark US 10-year Treasury yields edged lower to 2.8822 per cent after hitting a near 1-month high of 2.9190 per cent in the previous session. Lower yields reduce the opportunity cost of holding non-interest bearing gold.

In their July meeting minutes released on Wednesday, Fed officials said the pace of future rate hikes would depend on incoming economic data, as well as assessments of how the economy was adapting to the higher rates already approved.

After the release of the minutes, traders of futures tied to the Fed’s policy rate saw a half-percentage-point rate hike as more likely in September.

Data released on Wednesday showed US retail sales were unexpectedly unchanged in July as falling petrol prices weighed on receipts at service stations, but consumer spending appeared to pick up at the start of the third quarter.

Britain’s consumer price inflation rose to 10.1 per cent in July, its highest since February 1982, official figures showed.

SEE ALSO

Gold extends fall on stronger dollar, Fed rate-hike worries

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.32 per cent to 989.01 tonnes on Wednesday from 992.20 tonnes on Tuesday.

Spot silver eased 0.2 per cent to US$19.80 per ounce, platinum was steady at US$924.04, and palladium edged 0.2 per cent lower to US$2,137.20. REUTERS