Gold ticks up on softer dollar, doubts over early Fed taper

[BENGALURU] Gold prices firmed on Tuesday, propped up by a softer dollar and prospects of the US Federal Reserve delaying a tapering in its pandemic-era bond purchases.

Spot gold rose 0.2 per cent to US$1,826.75 per ounce by 1.08am GMT.

Prices had hit a 2-1/2-month high last week following a disappointing US non-farm payrolls data. A strong jobs recovery is crucial for the central bank to start withdrawing its stimulus measures.

Some investors view gold as a hedge against inflation that may follow stimulus measures, while lower interest rates reduce the opportunity cost of holding non-yielding bullion.

US gold futures eased 0.3 per cent to US$1,828.

The dollar index ticked down about 0.1 per cent, lifting gold's allure for holders of other currencies.

Most US markets were closed on Monday for the Labor Day holiday.

With the euro zone economy roaring back to life, the European Central Bank will debate a cut in its stimulus on Thursday, beginning a hard-fought and lengthy discussion on how to dismantle the crisis-fighting measures that have kept the bloc afloat.

In Japan, household spending grew less than expected in July as a resurgence of Covid-19 cases hindered consumer activity and threw broader economic recovery prospects into doubt.

India's gold imports in August nearly doubled from a year earlier on strong demand and as weaker prices prompted jewellers to ramp up purchases for the festive season, a government source said.

Silver firmed 0.4 per cent to US$24.76 per ounce, platinum rose 0.1 per cent to US$1,020.26 and palladium was flat at US$2,410.52.

REUTERS