Gold prices set for third weekly gain on US Fed pause views

GOLD prices climbed on Friday (Jul 21) as a weaker dollar made bullion cheaper for holders of other currencies, while the metal was poised for a third consecutive weekly gain on hopes that the US Federal Reserve will pause rate hikes after July.

Spot gold rose 0.1 per cent to US$1,971.79 per ounce by 0119 GMT. Bullion gained nearly 1 per cent so far this week.

US gold futures gained 0.2 per cent to US$1,973.80.

The metal slipped on Thursday from a two-month high as the dollar and bond yields climbed on stronger-than-expected US labour market data.

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, touching the lowest level in two months amid labour market tightness and defying efforts by the US Fed to slow demand.

The US dollar index was 0.1 per cent lower.

The Fed is expected to raise rates by 25 basis points (bps) in a Jul 25-26 meeting next week, keeping them in the 5.25-5.5 per cent range until cuts are seen 2024 onwards, per CME’s Fedwatch tool.

Most economists polled by Reuters expect a hike at the July meeting to be the last increase of the current tightening cycle from the Fed.

In Asia, Japan’s core consumer inflation re-accelerated in June and stayed above the central bank’s 2 per cent target for the 15th straight month, heightening the chance the Bank of Japan (BOJ) will revise up this year’s inflation at the Jul 27-28 policy meeting.

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Russia’s gold reserves stood at 74.9 million troy ounces at the start of July, the central bank said on Thursday.

Spot silver rose 0.4 per cent to US$24.84 per ounce, platinum was also up 0.4 per cent at US$956.86 and palladium gained 0.2 per cent to US$1,280.43. REUTERS