Gold prices near 8-month high as dovish Fed minutes weigh on dollar, yields

[BENGALURU] Gold steadied on Thursday (Feb 17) near an 8-month high touched earlier this week, as the US dollar and Treasury yields dipped on less hawkish-than-feared Federal Reserve minutes, and as the Ukraine crisis boosted demand for the safe-haven metal.

Spot gold held its ground at US$1,868.36 per ounce, as of 1.23 am GMT. Bullion had hit its highest level since June at US$1,879.48 on Tuesday.

US gold futures were steady at US$1,871.40.

Oil and gold prices rose on Wednesday after Nato and the United States said Russia was increasing its troop build-up near Ukraine, while dovish Fed minutes helped stocks close mostly flat on Wall Street.

Fed officials last month agreed that with inflation tightening its grip on the economy and employment strong, it was time to raise interest rates, but also that any decisions would depend on a meeting-by-meeting analysis of inflation and other data, according to the minutes of the Jan 25-26 policy meeting.

The dollar eased after the minutes suggested policymakers are not set on a particular pace of interest rate hikes, making gold more attractive to overseas buyers.

A dip in US Treasury yields decreased the opportunity cost of holding non-interest-paying bullion.

US retail sales increased by the most in 10 months in January, lifting the level of sales to a record high amid a surge in purchases of motor vehicles and other goods, but higher prices could limit the boost to economic growth this quarter.

Among other precious metals, spot silver was flat at US$23.54 per ounce and palladium rose 0.2 per cent to US$2,284.19.

Platinum dipped 0.5 per cent to US$1,056.53, easing off a 3-month high touched in the previous session. REUTERS