Gold set for monthly drop as recent gains in US yields, dollar weigh

GOLD prices firmed on Thursday (Aug 31) as a fresh set of soft US economic data added to expectations that the Federal Reserve will pause rake hikes this year, although a surge in Treasury yields and dollar kept bullion on track for a monthly loss.

Spot gold was up 0.2 per cent at US$1,946.17 per ounce by 0114 GMT, trading close to a one-month high hit on Wednesday. US gold futures steadied at US$1,973.10.

Bullion is on track for a nearly 1 per cent monthly decline as the US dollar eyes its first monthly rise in three and US Treasury yields see their fourth consecutive monthly climb having reached 2007 levels last week.

The US economy grew at a slightly less brisk pace than initially thought in the second quarter. Investors are now awaiting the PCE inflation data later in the day, and the non-farm payrolls report on Friday.

The Fed can end its interest rate hiking cycle if the labour market and economic growth continue to slow at the current gradual pace, the former president of the Boston Fed said on Wednesday.

Japan’s seasonally adjusted factory output fell more than expected in July from the previous month.

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Gold near three-week high as markets cut back US rate hike bets

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SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings edged 0.1 per cent higher to 890.10 tons on Wednesday.

Elsewhere, spot silver was steady at US$24.66 per ounce, having climbed to a more-than-one-month high on Wednesday.

Platinum added 0.3 per cent to US$977.02 as it heads for its second consecutive monthly gain. Palladium rose 0.5 per cent to US$1,228.42, but was set for a 4 per cent monthly fall. REUTERS