Saturday, March 25

Gold gains as dollar dip offsets some pressure from rate hike bets

Article content

Gold rose on Friday as the dollar’s

retreat seemed temporarily to stave off some pressure on the

Article content

precious metal from prospects of more interest rate hikes.

Spot gold rose 0.5% to $1,716.30 per ounce by 1:55

pm ET (1755 GMT), after rising to its highest since Aug. 30

earlier in the session. US gold futures settled 0.5%

higher at $1,728.6.

The yellow metal was on track to rise 0.3% for the week, its

first weekly rise in four.

“The US dollar index really dropped sharply overnight and

Article content

that has supported the gold and silver markets. Also seeing some

short-covering in the futures markets heading into the weekend,”

said Jim Wyckoff, senior analyst at Kitco Metals.

The dollar dropped to a more than one-week low

against its rivals, making greenback-priced bullion cheaper for

overseas buyers.

However, the gold market continues to see a slow and steady

reduction of exchange-traded funds (ETFs), and trading volumes

on US futures markets continue to weaken, suggesting that the

move higher is unlikely to be sustained, said independent

analyst Ross Norman.

Investors now await US inflation data for August due early

next week after recent hawkish comments from Fed Chair Jerome

Powell cemented bets of a large rate hike.

Article content

“If consumer prices come in hotter than expected, gold might

see selling pressure target the $1,680 region” and a sharp

deceleration with pricing pressures might only provide a modest

boost for gold, Edward Moya, senior analyst with OANDA, said in

a note.

Higher interest rates increase the opportunity cost of

holding non-yielding bullion.

In the physical gold market, demand in some Asian hubs

remained firm this week amid lower prices.

Silver rose 1.2% to $18.79 per ounce and was set for

a weekly gain.

Palladium gained 2% to $2,182.18 per ounce and was

headed for its best week since July.

Platinum inched up 0.1% to $879.83 per ounce and was

on track for its biggest weekly gain since early June.

(Reporting by Brijesh Patel, Arundhati Sarkar and Arpan

Varghese in Bengaluru; Editing by Vinay Dwivedi and Shounak