Gold has risen slightly from Friday’s low but ‘buyers are lacking conviction’, one analyst says
17 October 2022 - 07:28
byEileen Soreng
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Bengaluru — Gold prices rose on Monday after declining more than 1% in the previous session, as a pause in the dollar rally alleviated some pressure from the greenback-priced bullion, though looming US rate hikes restricted further gains.
Spot gold rose 0.4% to $1,648.91/oz, as of 4.05am GMT. The metal posted its biggest weekly decline since July last week.
US gold futures were up 0.4% at $1,655.30/oz.
The dollar index was flat, while the benchmark US 10-year treasury yields eased, moving away from the 14-year peak touched last week.
“Gold has lifted itself slightly from Friday’s low but buyers are lacking conviction, so looks more like technical repositioning,” said City Index analyst Matt Simpson.
“The dollar and yields will be a key driver for gold, and if they continue to rise then a move and test of $1,600 is likely just a matter of time.”
A survey from the University of Michigan on Friday showed consumer sentiment improved further in October, but inflation expectations deteriorated a bit, keeping expectations of another 75-basis-point rate hike intact.
US retail sales were unexpectedly flat in September.
St. Louis Fed President James Bullard said on Friday that the latest CPI data warrants continued “front-loading” through larger rate hikes of three-quarters of a percentage point but that does not necessarily mean rates need to be raised above the central bank's projections.
Gold is highly sensitive to rising US rates, which increases the opportunity cost of holding non-yielding gold.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 3.18 tonnes on Friday, their biggest one-day outflow since September 26.
Spot silver rose 0.7% to $18.39/oz, platinum was 0.3% higher at $901.67/oz and palladium gained 1.7% to $2,022.60/oz.
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Pause in dollar rally allows gold to firm
Gold has risen slightly from Friday’s low but ‘buyers are lacking conviction’, one analyst says
Bengaluru — Gold prices rose on Monday after declining more than 1% in the previous session, as a pause in the dollar rally alleviated some pressure from the greenback-priced bullion, though looming US rate hikes restricted further gains.
Spot gold rose 0.4% to $1,648.91/oz, as of 4.05am GMT. The metal posted its biggest weekly decline since July last week.
US gold futures were up 0.4% at $1,655.30/oz.
The dollar index was flat, while the benchmark US 10-year treasury yields eased, moving away from the 14-year peak touched last week.
“Gold has lifted itself slightly from Friday’s low but buyers are lacking conviction, so looks more like technical repositioning,” said City Index analyst Matt Simpson.
“The dollar and yields will be a key driver for gold, and if they continue to rise then a move and test of $1,600 is likely just a matter of time.”
A survey from the University of Michigan on Friday showed consumer sentiment improved further in October, but inflation expectations deteriorated a bit, keeping expectations of another 75-basis-point rate hike intact.
US retail sales were unexpectedly flat in September.
St. Louis Fed President James Bullard said on Friday that the latest CPI data warrants continued “front-loading” through larger rate hikes of three-quarters of a percentage point but that does not necessarily mean rates need to be raised above the central bank's projections.
Gold is highly sensitive to rising US rates, which increases the opportunity cost of holding non-yielding gold.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 3.18 tonnes on Friday, their biggest one-day outflow since September 26.
Spot silver rose 0.7% to $18.39/oz, platinum was 0.3% higher at $901.67/oz and palladium gained 1.7% to $2,022.60/oz.
Reuters
JSE faces lower Asian markets after Wall Street’s losses
Market data — October 16 2022
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