Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain. Picture: REUTERS/NEIL HALL
Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain. Picture: REUTERS/NEIL HALL

Bengaluru — Gold edged lower on Tuesday, pressured by a slight uptick in the dollar and held a narrow range in light trade ahead of the US Thanksgiving holiday.

Spot gold was down 0.1% at $1,223.01 an ounce at 10.47am GMT, having earlier hit a peak not seen since November 8 at $1,225.88.  US gold futures edged 0.1% lower to $1,224.1.

“[Trade] is relatively sideways at the moment ... gold does not have its own momentum behind it, it is simply responding to external forces rather than any energy and vigour of its own,” said Ross Norman, CEO of Sharps Pixley. “We see gold trading in a $1,215 to $1,240 range for the remainder of the year.”

The dollar index, which measures the greenback against major currencies, rose from its weakest in two weeks after cautious comments by US Federal Reserve officials over the global outlook and weak US economic data raised doubts on the pace of future rate hikes.

The Fed has raised rates three times this year, making it more expensive to hold non-interest-bearing gold. While a fourth rate hike is expected next month, and three more next year, a strong majority of economists polled by Reuters say the risk is that the Fed will slow that pace down.

“The Feds have changed the landscape to a more dovish terrain, suggesting that they too are turning a little bit risk-averse,” Stephen Innes, APAC trading head at Oanda in Singapore, said in a note.

A downtrend in global stocks over the past two months triggered limited flows into bullion, a traditional safe store of value in times of economic or political uncertainty, but gains were held in check as investors also preferred the safety of the dollar.

“Trade tensions remain heightened between the US and China, global equities are under pressure, while Brexit negotiations continue to create uncertainty across markets, keeping gold’s safe-haven status intact,” traders at MKS PAMP said in a note.

Investors are now keeping a close eye on a G20 summit in Argentina scheduled for later this month, when US President Donald Trump is expected to meet Chinese President Xi Jinping to discuss their trade dispute.

While both leaders expressed optimism about resolving their respective issues ahead of the meeting, a top Chinese diplomat, in a veiled criticism of Washington, said on Monday that the APEC summit’s failure to agree on a communiqué resulted from certain countries “excusing” protectionism.

Meanwhile, holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), rose 0.16% to 760.86 tonnes on Monday.

Among other precious metals, silver was down 0.2% at $14.39 an ounce. Palladium slipped 0.7% to $1,153.60 an ounce, while platinum fell 0.9% to $845.80 an ounce.