Friday, September 30

Gold hits more than one-week high as dollar slips


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Gold prices climbed more than 1% on

Friday to an over one-week high, as a weaker dollar boosted

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demand for the yellow metal, even as US Federal Reserve

policymakers vowed to raise interest rates to tame inflation

pressures.

Spot gold was up 0.7% at $1,719.89 per ounce by 1230

GMT after rising to its highest since Aug. 30 at $1,729.29

earlier in the session.

Bullion, up 0.5% so far this week, was heading for its first

weekly gain in four.

US gold futures rose 0.6% to $1,730.90.

“The US dollar index dropping back to a one-week low has

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boosted the price of gold, and there may well be further

strength into the inflation report and perhaps even beyond

that,” David Jones, chief market strategist at Capital.com said.

The dollar dropped over 1%, making greenback-priced

bullion less expensive for overseas buyers, while the benchmark

10-year US Treasury yields also pulled back from recent highs.

Investor focus now shifts to August US consumer price

index report due next week after recent hawkish comments from

Fed Chair Jerome Powell cemented bets of a large interest rate

hike to fight inflation.

Meanwhile, the European Central Bank raised its key interest

rates by an unprecedented 75 basis points on Thursday and

promised further hikes.

Higher interest rates increase the opportunity cost of

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holding non-yielding bullion.

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.

Elsewhere, spot silver added 0.4% to $18.6357 per

ounce and was set for a weekly gain.

Palladium rose 0.9% to $2,157.79 and was headed for

its best week since July.

Platinum edged 0.1% lower to $878.54, but was on

track for its biggest weekly gain since early June.

In the physical gold market, demand in some Asian hubs

remained firm this week as lower prices lured buyers.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Krishna

Chandra Eluri and Maju Samuel)

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