Picture: REUTERS/MARIYA GORDEYEVA
Picture: REUTERS/MARIYA GORDEYEVA

Bengaluru — Gold prices were mostly steady on Thursday amid a firm dollar, trading within sight of a two-month low hit earlier this week.

Spot gold was nearly unchanged at $1,263.21 an ounce by 4.06am GMT. It marked its lowest since October 6 at $1,260.71 on Tuesday.

US gold futures were flat at $1,265.70.

The dollar inched up against its peers on Thursday, as optimism towards US legislators making progress on tax legislation continued to grow.

US Senate Republicans agreed to talks with the House of Representatives on the tax legislation on Wednesday, amid early signs that lawmakers could bridge their differences and agree on a final bill ahead of a self-imposed December 22 deadline.

Hope that tax reforms would boost economic growth has dented demand for safe-haven assets such as gold.

INTL FCStone analyst Edward Meir said gold could move slightly lower heading into next week’s Federal Reserve meeting, as investors would be jittery about the Fed’s policy wording going forward.

Markets are widely anticipating an interest rate hike by the US central bank next week and are waiting on the outlook for further rate hikes in 2018.

Gold is highly sensitive to rising interest rates, as these tend to boost the dollar, in which the metal is priced.

"Gold will continue to be under pressure in view of rate hikes, dollar gains and strong US data," said Argonaut Securities analyst Helen Lau.

Spot gold is poised to break support at $1,262 an ounce, and fall to the next support level at $1,250, according to Reuters technicals analyst Wang Tao.

Meanwhile, global holdings in gold-backed exchange-traded funds (ETF) rose by 9.1 tonnes to 2,357 tonnes in November, with the net inflows coming entirely from Europe as the US dollar fell, the World Gold Council said on Wednesday.

In other precious metals, silver fell 0.1% to $15.95 an ounce, after hitting its lowest since mid-July in the previous session at $15.88 an ounce.

Platinum was up 0.1% at $902.50 an ounce, while palladium gained 0.2% to $995.25 an ounce.

Reuters

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