LONDON: Gold inched higher on Monday, as a slightly weak dollar and global economic worries countered concerns around aggressive monetary tightening by the US Federal Reserve, with focus being on several central bankers’ views this week.
Spot gold rose 0.2% to $1,842.99 per ounce by 0926 GMT, after falling 1.7% last week — its biggest since mid-May. US gold futures gained 0.2% to $1,845.00 per ounce.
The dollar index eased from near its highest level in about two decades, rekindling some demand for greenback-priced bullion among overseas buyers.
“Gold made an attempt to rebound this morning as the dollar softened and Treasury yields slipped. However, upside gains were capped by hawkish comments from Fed Governor Christopher Waller over the weekend,” said senior analyst at FXTM Lukman Otunga.
“The precious metal is likely to remain within a range, thanks to the conflicting forces empowering both bulls and bears. A fresh catalyst could be needed to tip the balance of power.”
Waller on Saturday became the latest US central banker to pledge a whatever-it-takes approach to fight inflation, days after the Fed raised interest rates by three-quarters of a percentage point and signalled more hikes to come.
“It’s a public holiday in the US, which means liquidity – and therefore volatility – is likely to be lower, thus making directional moves on gold difficult without a fresh catalyst,” City Index senior market analyst Matt Simpson said.
A host of central bankers will be speaking this week, led by a likely hawkish testimony from Fed Chair Jerome Powell’s to the House on Wednesday and Thursday.
High interest rates usually dim bullion’s appeal since they translate to an increased opportunity cost of holding the non-yielding asset.
Spot silver edged up 0.1% to $21.68 per ounce, platinum gained 0.6% to $938.46 and palladium jumped 0.9% to $1,831.32.
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