Gold stalls as investors weigh up mixed Fed outlook

Gold remained hemmed in a narrow range in choppy trading on Thursday, tracking moves in the dollar as mixed cues from U.S. Federal Reserve officials on the approach the central bank could take to withdraw stimulus kept investors wary.

Spot gold was little changed at $1,778.01 per ounce by 12:22 am EDT (1622 GMT), giving up some gains from earlier in the session as the dollar recouped initial declines.

U.S. gold futures shed 0.3pc to $1,778.50.

A day after Fed Chair Jerome Powell said interest rates would not be raised too quickly and that inflation wouldn't be the only determinant of policy, two Fed officials said on Wednesday inflation may persist longer than anticipated, with one official predicting a rate hike in late 2022.

"We have a more balanced narrative (on Fed's monetary policy) than we did in the past, suggesting that gold is going to trade in a broader range in the near term," TD Securities commodity strategist Daniel Ghali said.

Ghali noted the gold market was trying to find a balance between an overly hawkish pricing of Fed interest rate hikes if inflation proves to be transitory, supportive to gold, and a Fed that would act if inflation persists.

Bullion investors also largely ignored data that showed a dip in initial claims for U.S state unemployment benefits and a 6.4pc annualized increase in gross domestic product last quarter.

Silver gained rose 0.6pc to $26.01 per ounce, while platinum rose 0.8pc to $1,093.12. Palladium was up 1pc to $2,638.49 per ounce.

Higher automobile output once an ongoing chip shortage ends and solid economic growth could drive prices of autocatalyst platinum higher over the next 12 months, UBS analyst Giovanni Staunovo said in a note, forecasting end-December prices at $1,250.