Gold gains on softer dollar, safe-haven demand
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GOLD prices rose on Tuesday (Sep 6), buoyed by a pullback in the dollar and safe-haven buying due to economic slowdown concerns, though prospects of aggressive rate hikes capped further gains.
Spot gold rose 0.5 per cent to US$1,718.21 per ounce, as of 1.20 am GMT.
US gold futures gained 0.5 per cent to US$1,731.30.
The dollar index inched down 0.2 per cent after touching a 20-year peak in the previous session.
The euro zone is almost certainly entering a recession, with surveys on Monday showing a deepening cost of living crisis and a gloomy outlook that is keeping consumers wary of spending.
The European Central Bank faces the prospect of raising interest rates aggressively when it meets on Sep 8 just as the economy enters a downturn.
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After Russia halted gas flows via a major pipeline to Europe, several EU states triggered emergency plans that could lead to energy rationing and fuelling recession fears, with inflation soaring and interest rates on the rise.
However, further gains in gold were limited by expectations that the US Federal Reserve could deliver another hefty interest rate hike in its fight against inflation during its Sep 20-21 policy meet.
Even though gold is seen as a hedge against inflation and economic uncertainties, higher interest rates increase the opportunity cost of holding the non-yielding bullion and boosts the dollar.
Spot silver rose 0.9 per cent to US$18.32 per ounce, platinum was 0.7 per cent higher at US$851.50 and palladium gained 0.7 per cent to US$2,047.68. REUTERS
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