Gold inches lower; set for weekly gain on hopes of less aggressive Fed

GOLD prices inched lower on Friday (Nov 11) but were headed for a weekly gain as data pointed at signs of slowing inflation, lifting hopes that the US Federal Reserve would scale back on aggressive rate hikes.

Spot gold was 0.1 per cent down at US$1,751.87 per ounce, as of 0048 GMT. It is up 4.2 per cent for the week. US gold futures rose 0.1 per cent to US$1,755.20.

Bullion prices rallied nearly 3 per cent on Thursday to a more than two-month high after the US inflation data.

US consumer prices rose less than expected in October, pushing the annual increase below 8 per cent for the first time in eight months, the strongest signs yet that inflation was slowing, which would allow the Fed to scale back its hefty interest rate hikes.

Gold is considered an inflation hedge, but rising interest rates increase the opportunity cost of holding non-yielding bullion.

The dollar index was down 2.4 per cent for the week. A weaker dollar makes gold more appealing to overseas buyers.

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Gold traders in wait-and-watch mode ahead of US inflation data

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Mirroring sentiment, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.35 per cent to 911.57 tonnes on Thursday.

Spot silver was down 0.5 per cent at US$21.56. Platinum fell 0.4 per cent to US$1,028.51 and palladium slipped 0.2 per cent to US$1,960.49.

China’s usual year-end export surge is in doubt, as weak global demand dims a rare bright spot for the world’s second-biggest economy, already hurt by Covid-19 lockdowns, a frozen property sector and ebbing domestic consumption. REUTERS