Gold prices edge lower on steady dollar, Fed rate-hike jitters

GOLD prices inched lower on Wednesday (Oct 19) as the dollar steadied, while the US Federal Reserve’s commitment to tightening monetary policy also weighed on zero-yield bullion’s appeal.

Spot gold was down 0.1 per cent at US$1,650.75 per ounce, as of 1.25 am GMT.

US gold futures were up 0.1 per cent at US$1,657.30.

The dollar index was a tad bit higher in early Asian hours, having bounced off its lowest level since Oct 6 overnight.

The US central bank may need to push its benchmark policy rate above 4.75 per cent if underlying inflation does not stop rising, Minneapolis Fed president Neel Kashkari said on Tuesday.

Production at US factories rose in September indicating the manufacturing sector remains on reasonable footing despite the Fed’s efforts to hamper demand and lower inflation.

Although traditionally seen as a hedge against inflation, interest rate hikes to control soaring prices have reduced bullion’s appeal since it yields no interest.

Delegates from around the world meeting at the London Bullion Market Association’s annual precious metals conference in Lisbon predicted that gold prices would rise to 1,830.50 an ounce in a year’s time, up from around US$1,650 on Tuesday.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 0.29 tonnes on Tuesday.

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Spot silver eased 0.2 per cent to US$18.72 per ounce, platinum was 0.3 per cent higher at US$909.88 and palladium rose 0.3 per cent to US$2,019.75. REUTERS