Gold edges up on softer dollar; investors eye Powell’s comments

GOLD prices edged up on Tuesday (Feb 7), helped by a slight pullback in the dollar, with investors eyeing Federal Reserve chair Jerome Powell’s speech later in the day to gauge the US central bank’s monetary policy path.

Spot gold was 0.2 per cent higher at US$1,870.63 per ounce, as of 0046 GMT, after hitting its lowest since Jan 6 in the previous session. US gold futures rose 0.2 per cent to US$1,882.50.

The dollar index eased 0.1 per cent, making gold a more attractive bet for customers holding other currencies.

Fed funds futures traders now see rates rising above 5 per cent in May after data on Friday showed US job growth accelerated sharply last month, which raised expectations that the Fed might keep interest rates higher for longer.

Gold is sensitive to high interest rates, which lift the opportunity cost of holding non-yielding bullion.

US Treasury Secretary Janet Yellen said on Monday she saw a path for avoiding a US recession, with inflation coming down significantly and the economy remaining strong, given the strength of the US labour market.

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Gold hits over 4-week low as dollar edges higher

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SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.25 per cent to 917.92 tonnes on Monday from 920.24 tonnes on Friday.

Spot silver rose 0.1 per cent to US$22.28 per ounce, platinum edged 0.2 per cent lower to US$969.96 and palladium was little changed at US$1,597.78. REUTERS