Gold prices settle at highest in more than 2 weeks

Angelo Anderson
October 13, 2017

Prices earlier hit $1,297.40, the highest since September 26.

The dollar slipped on Friday, on track for weekly losses as investors awaited the USA inflation data to gauge the likelihood that the Federal Reserve will stick to its plan to raise interest rates again this year.

Platinum rose 0.4 percent to $932.90 an ounce after hitting a two-week high of $934.50 and palladium climbed 1.7 percent to $949.30 an ounce, the highest since September 13.

Spot gold was up 0.4 per cent at US$1,292.88 per ounce by 3.43pm EDT (1943 GMT), while U.S. gold futures futures for December delivery settled down US$4.90, or 0.4 per cent, at US$1,288.90 per ounce, prior to the release of the minutes.


Although the market's reaction was relatively subdued, the minutes suggest that Chairwoman Janet Yellen and other policy makers will increase interest rates once more in December, but that efforts to normalize policy will otherwise run at a gradual pace.

"We remain somewhat cautious on gold here, as we think the complex will have some difficulty moving higher as we approach both the European Central Bank meeting and the Fed rate increase slated for year-end", INTL FCStone analyst Edward Meir said in a note. Wall Street is pricing in an 83% chance of a rate increase in December, compared with a almost 88% probability the day before, according to CME Group data. "Overall, for the rest of 2017 we are not bullish on prices, especially with a rate hike still expected this year, and we are looking more towards 2018 for strength", RBC Capital Markets said in a note. The Fed has hiked rates twice so far this year.

The dollar wobbled against its peers on Wednesday and edged further away from a 10-week high scaled recently amid speculation that the USA tax overhaul plan introduced by President Donald Trump would stall, with a buoyant euro adding further pressure on the greenback. A softer buck can make commodities priced in the currency more appealing to buyers using weaker monetary units.

Silver was up 0.7 percent at $17.28 an ounce, after marking an over three-week high earlier in the session. The silver-focused ETF, the iShares Silver Trust SLV, +0.12% fell 0.5%. The upcoming Diwali festival in India could also spur gold buying, analysts said. Tensions between Iraq and Kurds in the region have escalated after a Kurdish independence referendum, while Trump's belligerent rhetoric with North Korean leader Kim Jong Un has had investors on edge.

Other reports by Iphone Fresh

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