GOLD steadied on Monday (Sep 25) after eking out a narrow 0.1 per cent gain last week, as investors assessed US Federal Reserve officials’ warning of further interest rate hikes ahead of a consumer inflation gauge due later this week.

Spot gold was mostly unchanged at US$1,924.54 per ounce by 0051 GMT, while US gold futures fell 0.1 per cent to US$1,944.30.

The US dollar hovered around a more than six-month high, while benchmark 10-year Treasury yields were near their 16-year peak.

Fed officials warned on Friday of further rate hikes even after voting to hold the benchmark rate steady last week, with three policymakers saying they remain uncertain the inflation battle is finished.

Higher interest rates discourage the buying of non-interest-paying bullion, which is priced in US dollars.

US business activity showed little change in September, a survey published on Friday showed, while a separate survey showed the eurozone economy is likely to contract this quarter and won’t return to growth anytime soon.

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The personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, lands on Sep 29.

Investors will also be watching events in Washington, where US lawmakers are haggling over a spending bill with a Sep 30 deadline to avert a potential government shutdown.

The Bank of Japan maintained ultra-low interest rates on Friday and its pledge to bring inflation sustainably to its 2 per cent target.

US equity funds suffered substantial outflows in the seven days to Sep 20, hit by worries of extended restrictive monetary policy.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell on Friday to their lowest level since Jan 2020.

Spot silver rose 0.1 per cent to US$23.55 per ounce, platinum shed 0.2 per cent to US$924.78 and palladium gained 0.2 per cent to US$1,251.35. REUTERS