Gold inches higher on softer dollar, yields

[BENGALURU] Gold prices edged up on Thursday (Nov 18), as the dollar eased and US bond yields retreated from a 3-week high, lifting bullion's appeal.

Spot gold rose 0.1 per cent to US$1,869.45 per ounce by 12.46 am GMT, after hitting an over 5-month peak on Wednesday (Nov 17).

US gold futures gained 0.1 per cent to US$1,871.50.

The dollar fell 0.1 per cent, pulling away from a 16-month peak scaled on Wednesday. A weaker dollar reduces bullion's cost to buyers holding other currencies.

Benchmark US 10-year Treasury yields were modestly up on Thursday but retreated from a 3-week high hit in the previous session, lowering non-yielding gold's opportunity cost.

Chicago Federal Reserve President Charles Evans on Wednesday reiterated that it will take until the middle of next year to complete the Fed's wind-down of its bond-buying programme even as the central bank checks to see if high inflation recedes as he expects.

British inflation has hit a 10-year high as household energy bills rocket, bolstering expectations the Bank of England will raise interest rates in December.

The European Central Bank (ECB) must be ready to rein in inflation in the euro zone if it proves more durable than forecast, ECB board member Isabel Schnabel said.

A hike in rates should reduce bullion's appeal as higher interest rates raises the non-interest bearing metal's opportunity cost.

Indicative of sentiment, holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose about 0.1 per cent to 976.87 tonnes on Wednesday.

Spot silver rose 0.2 per cent to US$25.11 per ounce.

Global silver demand will rise to 1.029 billion ounces this year, exceeding a billion ounces for the first time since 2015, the Silver Institute said in a report.

Platinum gained 0.3 per cent to US$1,059.98 and palladium rose 0.3 per cent to US$2,193.69.

REUTERS