Gold steadies near 1-month high buoyed by softer dollar, yields

[BENGALURU] Gold prices hovered near a 1-month peak on Thursday as the dollar and longer-dated Treasury yields retreated from recent highs following hotter-than-expected US inflation data.

Spot gold was little changed at US$1,793.72 per ounce by 1 am GMT. Prices hit their highest level since Sep 16 at US$1,795.81 on Wednesday.

US gold futures slipped 0.1 per cent to US$1,792.20.

Making the precious metal cheaper for holders of other currencies, the dollar index fell 0.5 per cent overnight, retreating from a more than 1-year high.

Benchmark US 10-year Treasury yields pulled back from a more than 4-month high, reducing the opportunity cost of holding non-interest bearing gold.

US consumer prices increased solidly in September as Americans paid more for food, rent and a range of other goods, putting pressure on the Biden administration to urgently resolve strained supply chains, which are hampering economic growth.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Minutes from the Federal Reserve's September meeting showed the central banks could start reducing its crisis-era support for the US economy by mid-November, but policymakers remained split over how big of a threat high inflation represents and how soon they may need to raise rates in response.

A group of banks that partnered with the London Metal Exchange to launch gold and silver futures in 2017 is preparing to abandon the project after hoped-for volumes did not materialise, 3 sources with direct knowledge of the matter said.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.2 per cent to 982.72 tonnes on Wednesday from 985.05 tonnes on Tuesday.

Spot silver rose 0.1 per cent to US$23.09 per ounce, having hit a near 1-month high in the previous session.

Platinum was flat at US$1,019.68 and palladium eased 0.1 per cent to US$2,103.81, having jumped as much as 5.2 per cent on Wednesday.

REUTERS