Gold slips as dollar halts slide; markets await Fed clarity

GOLD prices eased on Wednesday (Oct 5) as the dollar somewhat stabilised from its drop in the previous session, although bullion held above key US$1,700-per-ounce level with investors eyeing more clarity on the US Federal Reserve’s future policy stance.

Spot gold was down 0.2 per cent at US$1,722.69 per ounce, as of 1.20 am GMT, but was not far from US$1,729.39, its highest level since Sep 13 scaled on Tuesday.

US gold futures were flat at US$1,731.70.

The dollar index crawled 0.1 per cent higher after the unit shed 1.3 per cent overnight to its biggest drop since March 2020.

A government survey showed on Tuesday that US job openings fell by the most in nearly 2-1/2 years in August, suggesting that the labour market was starting to cool as the economy grapples with higher interest rates.

San Francisco Federal Reserve Bank president Mary Daly said on Tuesday the US central bank has the tools and the knowledge to bring down high inflation and will use them, even as it tries to find the “gentlest” way to do so.

Gold is highly sensitive to rising US interest rates, as they increase the opportunity cost of holding the metal and boosts the dollar in which the bullion is priced.

Gold-supplying banks have cut back shipments to India ahead of major festivals in favour of focusing on China, Turkey, and other markets where better premiums are offered, three bank officials and two vault operators told Reuters.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 1.74 tonnes on Tuesday.

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Gold retreats from 3-week peak as dollar gains ground

Spot silver dipped 0.8 per cent to US$20.95 per ounce, platinum fell 0.2 per cent to US$928.12 and palladium slipped 0.6 per cent to US$2,301.77. REUTERS