Gold hovers near 3-month high on hopes of smaller Fed hikes

GOLD hovered near a three-month high on Tuesday (Nov 15), as a top US central bank official’s comment raised hopes that the Federal Reserve would adopt a less aggressive approach on rate hikes, while a stronger dollar kept gains in check. Spot gold was steady at US$1,770.70 per ounce, as of 0122 GMT, after hitting its highest since Aug 17 in the previous session. US gold futures fell 0.3 per cent to US$1,771.80 per ounce. The dollar index rose 0.3 per cent against its rivals, making gold more expensive for other currency holders. The Fed will likely soon slow its interest rates hikes, Fed vice chair Lael Brainard signalled on Monday but emphasised the central bank still had more work to do. While gold is considered a hedge against inflation, rising interest rates tend to dull bullion’s appeal as the metal pays no interest. Traders now see an 89 per cent probability of a 50-basis-point increase at the US central bank’s December meeting, with only an 11 per cent likelihood of a 75-basis-point rise. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.03 per cent to 910.41 tonnes on Monday from 910.12 tonnes on Friday. Speculators cut net short positions by 30,659 contracts to 8,219 in Comex gold in the week to Nov 8, the US Commodity Futures Trading Commission said. A gauge of global stocks ended lower on Monday and US bond yields rose as investors assessed comments from Fed officials to try and determine the central bank’s path of rate hikes. Spot silver was little changed at US$21.97 per ounce. Platinum eased 0.3 per cent to US$1,017.30 and palladium was down 0.2 per cent at US$2,020.70. REUTERS