Gold stalls as firmer dollar counter slower rate-hike hopes

GOLD prices were flat on Wednesday (Jan 18) as the dollar held firm, although expectations of slower pace of interest rate hikes by the US Federal Reserve limited losses in zero-yielding bullion.

Spot gold was unchanged at US$1,907.59 per ounce, as of 0053 GMT. US gold futures were flat at US$1,910.30.

The dollar index edged up 0.1 per cent. A stronger dollar tends to make bullion more expensive for other currency holders.

The US central bank raised rates by 75 basis points (bps) four times last year, before slowing to a 50 bps increase in December. Traders are mostly pricing in a 25 bps rate hike increase at the Fed’s next policy meeting.

Lower rates tend to be beneficial for gold, as they decrease the opportunity cost of holding the non-yielding asset.

Canadian miner Barrick Gold on Tuesday reported a 13.4 per cent sequential rise in gold production in what could be its highest quarterly output last year.

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SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.3 per cent to 909.24 tonnes on Tuesday.

Spot silver was steady at US$23.91, platinum fell 0.1 per cent to US$1,038.19 while palladium lost 0.2 per cent to US$1,740.64. REUTERS