AMSTERDAM/LONDON: Gold nudged up on Thursday, aided by a slight dip in the dollar, but mixed cues from US Federal Reserve officials on the approach the central bank could take to withdraw stimulus kept investors on their toes and muted gains.
Spot gold gained 0.3% to $1,783.46 per ounce by 10:24 am EDT (1424 GMT), while US gold futures were up 0.1% at $1,784.30.
A day after Fed Chairman 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.
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 — in turn supporting gold — and a Fed that would act if inflation persists, TD Securities commodity strategist Daniel Ghali said.
If the Fed does step in, it would translate into a more “balanced narrative” from the central bank than in the past, pushing gold into a “broader range,” Ghali added.
A lower dollar index buoyed gold, making it cheaper for those holding other currencies.
Gold faced technical resistance around the $1,805-$1,830 range and “that’s going to make some people a bit nervous”, StoneX analyst Rhona O’Connell said.
Bullion investors also largely ignored data that showed a dip in initial claims for U.S state unemployment benefits and a 6.4% annualized increase in gross domestic product last quarter.
Silver gained 0.9% to $26.08 per ounce, while platinum rose 0.7% to $1,091.37. Palladium was up 1.2% at $2,644.68.
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.
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