Gold poised for weekly gain as dollar hits over one-year low

GOLD prices on Friday (Jul 14) were set for their biggest weekly gain since April, as the US dollar hovered close to a more than one-year low on bets the Federal Reserve will soon hit the brakes on interest rate hikes.

Spot gold was steady at US$1,958.45 per ounce by 0051 GMT, and up 1.8 per cent for the week. US gold futures were almost unchanged at US$1,963.00.

Data on Thursday showed US producer prices barely rose in June, providing more evidence the economy had entered a disinflation phase.

Meanwhile, the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, indicating the labour market remained tight.

Federal Reserve governor Christopher Waller said on Thursday he’s not ready to call an all clear on US inflation and favours more rate hikes this year, saying the upcoming July meeting should bring an increase.

Interest rate futures showed markets mostly priced in another rate hike from the Federal Open Market Committee (FOMC) at its Jul 25-26 meeting, but expectations of further increases have dropped.

The US dollar index touched its lowest level since April 2022, making gold less expensive for overseas investors, while the yield on 10-year US Treasury notes held close to a two-week low hit in the previous session.

Gold is used as a safe investment during times of political and financial uncertainty, but higher interest rates increase the opportunity cost of holding non-yielding bullion.

Elsewhere, Australia on Friday appointed Michele Bullock as the next central bank governor, replacing Philip Lowe.

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Gold holds steady on hopes of US Fed nearing end of rate hikes

Spot silver fell 0.2 per cent to US$24.814 per ounce, platinum shed 0.4 per cent to US$968.65 and palladium dropped 1.4 per cent to US$1,277.35. REUTERS