Shadow of Fed's tapering looms for gold

GOLD prices spiked up 2 per cent on the last day of September after a dismal US weekly jobs report stayed the hand of an appreciating dollar, and an upsurge in the 10-year Treasury note's yield besieged bullion prices.

The yellow metal had declined 3.3 per cent for the month, driven by expectations that the Federal Reserve will soon start tapering its economic support of the US economy. Expectations are for a tapering timeline to be announced at the November meet.

Gold prices had been drifting steadily lower after Federal Reserve chair Jerome Powell signalled that the Fed plans to announce as early as November that it will start withdrawing support. Some Fed policymakers had also postulated that the initial rate hike would likely take place in 2022 rather than 2023 as forecasted.