AMSTERDAM/LONDON: Gold prices edged higher on Thursday as the dollar eased from a one-week peak, though gains were kept in check after hawkish comments from a key Federal Reserve official raised early tapering bets.
Spot gold was up 0.1% at $1,813.14 per ounce by 1143 GMT, while US gold futures gained 0.2% to $1,817.30.
The US dollar index was 0.2% lower after hitting a one-week high earlier in the session, making gold less expensive for other currency holders.
Gold prices jumped more than 1% on Wednesday helped by weaker than expected ADP jobs data in the United States,
However, bullion pared most of the gains after strong US services industry activity data and hawkish remarks from Fed Vice Chair Richard Clarida on interest rates.
Independent analyst Ross Norman said the mood is lacklustre towards gold, with the market seemingly unable to generate much momentum after Clarida’s comments.
Higher interest rates raise the opportunity cost of holding non-interest bearing gold.
Clarida also suggested the central bank could start cutting back on its asset purchase programme later this year. “The comments coming from various Fed officials give the impression that the balance of power is falling in favour of the hawks, something a strong jobs report will only accelerate,” OANDA analyst Craig Erlam said in a note.
“This doesn’t bode well for gold, despite the technical picture continuing to look bullish.”
Comments
Comments are closed for this article.