Gold firms above $1,700/oz on hopes of less aggressive Fed

Gold firms above $1,700/oz on hopes of less aggressive Fed

5 Sep    Finance News

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Gold prices held above the key $1,700 per

ounce level on Monday, as hopes that the Federal Reserve might

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slow the pace of rate hikes after mixed U.S. jobs data helped

offset pressure from a robust dollar.

Spot gold was steady at $1,711.62 per ounce by 0848

GMT. U.S. gold futures rose 0.1% to $1,724.

However, trading is expected to be thin with most of the

U.S. markets closed for Labour Day holiday.

Gold posted its best day in nearly a month on Friday after

U.S. data showed moderate wage growth in August and a rise in

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the unemployment rate to 3.7% suggested the labor market was

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starting to loosen.

“Expectations around future Fed rate hikes have softened

slightly but the jobs report will have to be paired with a good

inflation reading to have any material impact,” said Craig

Erlam, senior market analyst at OANDA.

“We may see some support for gold above $1,700 for now but

with the dollar so favored and central banks not easing off the

brake, further downside pressure may still come and a break

below $1,680 looks very possible.”

The European Central Bank is due to meet later this week,

where it is expected to deliver a large 75 basis-point interest

rate hike to tame record high inflation.

Fed’s next policy meeting is scheduled for Sept. 20-21.

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Weighing on gold, the dollar index notched a 20-year

high against its rivals, making bullion expensive for holders of

other currencies.

European shares tumbled after Russia extended a halt on gas

flows down the Nord Stream 1 pipeline to Europe, sparking

worries over energy prices.

Spot silver rose 0.5% to $18.11 per ounce, platinum

gained 0.7% to $840.50, while palladium eased 0.1%

to $2,021.45.

Stronger-than-expected platinum shipments to China in the

first half of the year spurred shortages elsewhere, as supply

declined from mines and recycling, the World Platinum Investment

Council said.

(Reporting by Brijesh Patel in Bengaluru; Editing by Maju

Samuel)

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