Gold price dips as dollar strengthens

Bengaluru — Gold slipped on Tuesday as the dollar strengthened, while prospects of elevated US interest rates for a longer period also weighed on the non-yielding bullion’s appeal.

Spot gold fell 0.2% to $1,734.59 an ounce by 4am GMT, having hit a one-month low of $1,719.56 in the previous session. US gold futures dipped 0.1% to $1,747.60.

The dollar index rose 0.1%, after easing off a two-decade peak hit on Monday. Gold will continue to be driven by sentiment in the dollar in the short term, said Stephen Innes, managing partner at SPI Asset Management.

“The market’s in a wait-and-see mode to see how the economic data plays out and if it starts to get bad in the US I think that’s going to encourage the gold bulls to come back into the fray again,” Innes said.

At the Jackson Hole central banking conference in Wyoming the US Federal Reserve and the European Central Bank struck a hawkish note, pledging all efforts to tame stubbornly high inflation even if growth takes a hit.

While gold is considered a safe bet during economic uncertainty, interest-rate hikes increase the opportunity cost of holding the bullion. Markets are now largely pricing in a 75-basis-point rate hike at the Fed’s September meeting.

Indicative of investor sentiment, holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.4% to 980.61 tonnes on Monday. Spot gold may retest a resistance at $1,742 an ounce, a break above which could lead to a gain into a $1,748-$1,755 range, according to Reuters technical analyst Wang Tao.

Spot silver fell 0.4% to $18.66 an ounce, platinum shed 0.8% to $857.35 and palladium rose 0.3% to $2,152.14.

Reuters