Gold gains as US dollar, yields slip after Fed keeps rates steady
GOLD prices edged higher on Thursday (Nov 2), as the US dollar and bond yields slipped after the Federal Reserve held interest rates steady and acknowledged the tighter financial conditions faced by businesses and households.
Spot gold was up 0.2 per cent to US$1,985.99 per ounce by 0147 GMT and US gold futures gained 0.3 per cent to US$1,993.80.
The Fed held interest rates steady on Wednesday as policymakers struggled to determine whether financial conditions may be tight enough already to control inflation, or whether an economy that continues to outperform expectations may need still more restraint.
The US dollar index was down 0.5 per cent against its rivals, making gold less expensive for other currency holders, while Benchmark US 10-year note yields fell to a more than two-week low.
Fed chair Jerome Powell said that market borrowing costs would need to be sustainably higher for that to bear on future central bank monetary policy choices.
Higher interest rates raise the opportunity cost of holding gold.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.24 per cent to 861.51 tonnes on Wednesday from 859.49 tonnes on Tuesday.
On the geopolitical front, Israeli forces killed another Hamas commander on Wednesday in their second strike on Gaza’s Jabalia refugee camp in two days, the military said.
Market focus now shifts to US non-farm payrolls report on Friday for more cues on Fed’s interest rate path.
Data on Wednesday showed US job openings increased in September, pointing to persistent labour market tightness that is supporting the economy.
Spot silver eased 0.2 per cent to US$22.94 per ounce, platinum rose 0.6 per cent to US$925.97 and palladium rose 0.9 per cent to US$1,112.58. REUTERS
Share with us your feedback on BT's products and services
