Gold heads for weekly loss on hawkish Federal Reserve stance

GOLD prices were little changed on Friday, but the metal was headed for a second straight weekly drop as a stronger dollar and US Federal Reserve’s hawkish policy stance clouded outlook for the non-yielding bullion.

Spot gold rose 0.1 per cent at US$1,631.33 per ounce, as of 0043 GMT, but it was down 0.6 per cent for the week so far.

US gold futures rose 0.2 per cent to US$1,633.70.

The dollar index was set for its biggest weekly gain since Sept 23. On Wednesday, the Fed raised interest rates by 75 basis points and Chair Jerome Powell vowed to “keep at” their battle to beat down inflation.

Gold is considered an inflation hedge, but rising interest rates dent the non-yielding asset’s appeal.

Investors’ focus now shifts to the US non-farm payrolls data for October due at 1230 GMT, which could offer further cues on the Fed’s rate-hike plan.

SEE ALSO

Gold ticks higher on dollar pullback; hawkish Powell caps upside

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.82 per cent to 911.59 tonnes on Thursday from 919.12 tonnes on Wednesday.

Meanwhile, the Bank of England raised interest rates by the most since 1989 on Thursday but warned investors that the risk of Britain’s longest recession in at least a century means borrowing costs are likely to rise less than they expect.

Spot silver was flat at US$19.46, platinum fell 0.1 per cent to US$917.84 and palladium was steady at US$1,800.81. REUTERS