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HomeBusinessGold holds in tight range as traders seek confirmation on rate hikes

Gold holds in tight range as traders seek confirmation on rate hikes

By Ashitha Shivaprasad
(Reuters) – Gold prices hemmed in a tight range on Wednesday as investors looked to gauge the pace of rate hikes by the U.S. Federal Reserve.

Spot gold was little changed at $1,772.05 per ounce, as of 0416 GMT. U.S. gold futures rose 0.1% to $1,784.40.

The dollar index held steady after rising about 0.3% in the previous session. A stronger dollar makes bullion less appealing to overseas buyers. [USD/]

“The key influence on the gold price is dollar sentiment. Next week’s FOMC (Federal Open Market Committee) meeting will determine the ultimate direction of this sentiment,” said Michael Langford, director at corporate advisory firm AirGuide.

“Gold in the next few trading sessions has more downside risk than upside, prior to the FOMC meeting.”

Fed fund futures are now pricing in a 91% chance of 50-basis point (bps) rate increase in the December meeting.

The November Consumer Price Index (CPI) data will be released on Dec. 13 and final Fed meeting of 2022 is scheduled on Dec. 13-14.

High interest rates have weighed on gold’s traditional status as a hedge against inflation and other uncertainties this year, as they translate into higher opportunity cost of holding the non-yielding metal.

“Gold is still comfortably below the $1,800 level and seems likely to consolidate closer to the $1,760 region,” Edward Moya, senior analyst with OANDA, said in a note.

Spot silver edged 0.4% higher to $22.25.

Platinum was up 0.1% at $989.51 and palladium rose 0.5% to $1,858.55.

“We see platinum outperforming palladium as demand for the precious metal is boosted from both jewellery and industrial sectors. Further, normalising of the supply chain should see growth in auto catalyst demand,” said ANZ in a note.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu and Uttaresh.V)

Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.

Source: The Print

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