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Gold rose on Friday as the dollar’s
retreat seemed temporarily to stave off some pressure on the
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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
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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.
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“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
Dasgupta)
financialpost.com