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Gold steady amid expectations for further U.S. rate hikes

Reuters 

By N R

(Reuters) - Gold prices held firm on Monday, below a 3-1/2-month peak hit last week, amid expectations of further U. S. hikes to come this year.

Spot gold was mostly unchanged at $1,322.50 an ounce at 0259 GMT. Last week, the touched its highest since Sept. 15 at $1,325.86.

Spot gold rose for a fourth straight week last week.

U. S. gold futures were also mostly unchanged on Monday at $1,321.50 an ounce.

"January is usually a good month for gold prices and should remain so on the anticipation of physical demand ahead of the Chinese New Year," said Stephen Innes, of trading at

"While there could be some downside pressure from a possible correction, gold will likely remain firm until a March Fed hike possibility comes on the radar," Innes said.

The U. S.

December non-farm payrolls report on Friday was weaker than expected, but investors reckoned the U. S. Federal Reserve would still raise interest rates multiple times this year, although at a gradual pace.

The dollar held steady above a recent 3-1/2-month low against a basket of currency peers on Monday.

Gold is highly sensitive to rising U. S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Meanwhile, hedge funds and money managers raised their net long positions in COMEX gold in the week to Jan. 2, (CFTC) data showed on Friday.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.14 percent to 834.86 tonnes on Friday from 836.04 tonnes on Thursday.

Physical gold demand across remained subdued last week as prices rallied to a three-and-a-half-month high, keeping away from the market.

Among other metals, spot silver inched 0.1 percent lower to $17.20 an ounce, after having hit a 1-1/2-month high on Friday at $17.29.

Platinum was down 0.2 percent at $967.90 an ounce, hitting a more than 3-1/2-month top at $970.5 earlier in the session.

Palladium was stable at $1,090.49 an ounce. Last week paladiaum hit a record high at $1,105.70.

(Reporting by in Bengaluru; Editing by and Tom Hogue)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 08 2018. 09:28 IST
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