Gold inches higher as dollar weakens; Fed minutes on radar

GOLD prices inched up on Wednesday (Nov 23) buoyed by a weaker dollar, while investors awaited the minutes of the US Federal Reserve’s latest policy meeting that could offer clues on further interest rate hikes.

Spot gold was up 0.1 per cent at US$1,741.80 per ounce by 0044 GMT. US gold futures edged 0.2 per cent higher to US$1,742.70.

The dollar fell 0.6 per cent overnight and was flat at 107.080 during early trading on Wednesday, making gold less expensive for other currency holders.

Market participants are awaiting the minutes of Fed’s Nov 1-2 policy meeting due at 1900 GMT.

At the beginning of this month, the US central bank delivered a fourth consecutive 75 basis-point rate hike to tame inflation in what has become the fastest tightening of monetary policy in 40 years.

The Fed may need to raise interest rates to a higher level and hold them there for longer in order to successfully moderate consumer demand and bring down high inflation, Kansas City Fed president Esther George said on Tuesday.

Fed Bank of Cleveland president Loretta Mester reiterated that getting inflation down remains critical for the central bank.

Although gold is seen as a hedge against inflation, rising US interest rates dull non-yielding bullion’s appeal.

Fed fund futures are now pricing in a 79 per cent chance of 50-basis point hike in the December meeting.

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SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.10 per cent to 906.93 tonnes on Tuesday from 906.06 tonnes on Monday.

Spot silver was steady at US$21.08 per ounce, platinum rose 0.4 per cent to US$994.50, while palladium was little changed at US$1,858.20. REUTERS