Business Standard

Gold prices set for seventh monthly fall as dollar and yields weigh

Spot gold eased 0.1% to $1,640.09 per ounce by 1211 GMT, shedding about 1% so far in the month. U.S. gold futures inched 0.1% lower to $1,643.40

Gold

Photo: Bloomberg

Reuters
Gold prices slipped on Monday en route to their seventh straight monthly fall, weighed down by a stronger dollar and elevated U.S. bond yields, while markets looked forward to this week's Federal Reserve meeting for more clarity on its rate-hike path.
Spot gold eased 0.1% to $1,640.09 per ounce by 1211 GMT, shedding about 1% so far in the month. U.S. gold futures inched 0.1% lower to $1,643.40.
Markets are likely to be in a wait-and-see mode until the Fed's decision and with rate increases largely priced in, it will take an unexpectedly smaller or larger move to impact markets, said Rupert Rowling, an analyst at Kinesis Money.
"But with inflation still stubbornly high and the U.S. jobs market holding up relatively well so far, the Fed may have sufficient breathing space to continue its hawkish stance for a while longer yet," Rowling said.
Making gold less appealing for other currency holders, the dollar index rose 0.4%, while the benchmark 10-year Treasury yields stayed above the 4% threshold.
The Fed is widely expected to deliver a fourth straight 75 basis-point rate increase at its Nov. 1-2 policy meeting, and U.S. rate hikes increase the opportunity cost of holding zero-yielding bullion.
"Higher interest rates and a stronger dollar continue to be headwinds for gold, with market participants closely watching what the Fed will decide this week on the policy rate," UBS analyst Giovanni Staunovo said.
Data released on Friday showed underlying inflation pressures continued to bubble in the United States, reducing expectations of a Fed slowdown.
Spot silver fell 0.4% to $19.16 per ounce.
Platinum dropped 2.1% to $925.17, but was headed for its biggest monthly gain since February 2021.
Palladium lost 0.6% to $1,888.16 and was set for its biggest monthly drop since May.
UBS forecast palladium prices to drop to $1,700 by end-2023.
 
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Subhranshu Sahu)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Oct 31 2022 | 9:44 PM IST

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