Gold prices edge up on weaker dollar

GOLD prices edged higher in early Asian trade on Monday (Jun 26), helped by a weaker US dollar, although chances of more interest rate hikes by the Federal Reserve this year to tame sticky inflation weighed on bullion’s appeal.

Spot gold rose 0.3 per cent to US$1,926.29 per ounce by 0051 GMT. US gold futures were up 0.3 per cent at US$1,936.10 per ounce

The dollar index was down 0.2 per cent, making gold more attractive for buyers holding other currencies.

Bullion fell 1.8 per cent in the previous week on hawkish comments from several Fed officials.

In his congressional testimony last week, Fed chair Jerome Powell signalled more rate hikes ahead but vowed the central bank would proceed with caution.

San Francisco Fed Bank president Mary Daly said on Friday two more rate hikes this year is a “very reasonable” projection.

Investors now expect a 72 per cent chance of a rate hike in July, with rate cuts seen from 2024 onwards.

US business activity fell to a three-month low in June as services growth eased for the first time this year, yet economic growth ticked up a notch in the second quarter.

Elsewhere, Japan’s top currency diplomat Masato Kanda said the country would not rule out any options available to respond to currency moves, stepping up warnings against recent yen weakening that was “rapid and one-sided”.

SEE ALSO

Gold prices set for worst week in 4-1/2 months on hawkish US Fed

Stocks slipped and oil rose as investors figured an abortive weekend mutiny by Russian mercenaries raised questions about stability and crude supply.

Spot silver rose 0.7 per cent to US$22.57 per ounce, while platinum gained 0.8 per cent to US$924.13.

Palladium rose 1 per cent to US$1,297.63. The metal had hit a four-year low of US$1,269.09 an ounce on Thursday. REUTERS