Gold prices inch down on upbeat risk sentiment
- The dollar rebounded slightly, pressuring bullion, but was still heading for its worst month since January 2018.
- Palladium was up 0.1pc at $1,756.55 an ounce, having hit an all-time high of $1,783.21 last week.
- US gold futures settled down 0.4pc at 1,488.10.
Spot gold was down 0.3pc at $1,485.03 per ounce as of 1:52 p.m. EDT (1752 GMT).
US gold futures settled down 0.4pc at 1,488.10.
"Equity markets are doing pretty well. That means risk appetite is there, but at the same time, the dollar is rebounding a little bit and two year (Treasury yields) rates moved higher," said Bart Melek, head of commodity strategies at TD Securities.
Appetite for riskier assets improved on hopes for a resolution to the protracted US-China trade war and Britain avoiding a European Union exit.
The dollar rebounded slightly, pressuring bullion, but was still heading for its worst month since January 2018, against its key rivals.
A strong dollar makes greenback denominated gold costlier for investors holding other currencies, while higher Treasury yields increase the opportunity cost of holding non-yielding bullion.
"We continue to have ambiguity about central bank monetary policy, there is some hope that the US economy will do better than thought. Various Fed speakers are telling that additional rate cuts, moving into 2020, may not be on the cards," Melek said.
Bullion has risen about 16pc so far this year and one of the major supporting factors is hope for further rate cuts by the Fed. However, amid mixed signals from Fed policymakers it is unclear if they, overall, will support a cut.
Federal fund futures show that traders see an 87pc chance for a 25 basis-point rate cut by the US central bank in its month-end monetary policy meeting.
"Ultimately the main driver in gold is the US Fed and what they're doing with the (interest) rates," Bob Haberkorn, senior market strategist at RJO Futures said.
Meanwhile, hedge funds and money managers cut their bullish positions in COMEX gold and silver contracts in the week to Oct. 15, data showed on Friday.
Elsewhere, silver rose 0.1pc to $17.56 per ounce, while platinum was down 0.2pc at $887.09.
Palladium was up 0.1pc at $1,756.55 an ounce, having hit an all-time high of $1,783.21 last week.
"Sell rates for palladium reached the highest level since January. This suggests the recent rally has been driven by fundamentals, rather than speculative interest," ANZ Bank said.
"And with the market likely to remain tight for the foreseeable future, we believe there is plenty more upside for (palladium) prices," ANZ added in a note.