Gold hovers near six-month low as US dollar, yields weigh

GOLD edged up on Thursday (Sep 28) but hovered near a more than six-month low hit in the last session, as the US dollar and Treasury yields held at elevated levels, with markets awaiting US economic data for clues on the Federal Reserve’s interest rate path.

Spot gold was up 0.1 per cent to US$1,876.89 per ounce by 0040 GMT, after shedding 1.4 per cent, its biggest daily decline in two months, on Wednesday. US gold futures rose 0.17 per cent to US$1,894.20.

The US dollar hit a 10-month high against its major peers while Treasury yields climbed a fresh 16-year peak, as investors bet the US economy will outperform its competitors in an environment of high-interest rates.

Higher rates raise the opportunity cost of holding bullion, which is priced in US dollars and does not yield any interest.

Orders for long-lasting US manufactured goods rose in August, as an increase in machinery and other products offset a drop in civilian aircraft, and business spending on equipment appeared to regain momentum after faltering early in the third quarter.

Republican US House Speaker Kevin McCarthy on Wednesday rejected a stopgap funding bill advancing in the Senate, bringing closer the fourth partial US government shutdown in a decade with just four days to go.

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Gold lingers near one-month low as US dollar keeps momentum

Market focus now turns to the revised US GDP growth rate for the second quarter and weekly jobless claims due later in the day, with the August personal consumption expenditures price index, the Fed’s preferred inflation gauge, due on Friday.

Spot silver firmed 0.2 per cent to US$22.56 per ounce, platinum gained 0.3 per cent to US$890.01 and palladium rose 0.3 per cent to US$1,225.01. REUTERS