October 2, 2022

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Gold gains as dollar, yields slip; focus on U.S. inflation data

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Gold prices rose on Monday following a

pullback in the dollar and U.S. Treasury yields, while investor

focus shifted to U.S. inflation data for clues on the Federal

Reserve’s rate hike plan.

Spot gold rose 0.8% to $1,787.39 per ounce by 2:25

p.m. ET (1825 GMT). U.S. gold futures also settled up

0.8% at %1,805.2.

The dollar index fell 0.2%, making gold more

appealing to other currency holders. U.S. Treasury yields also

slipped.

Gold is considered a safe investment amid political tensions

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and recession worries, but high interest rates tend to dim the

appeal for bullion, which pays no interest.

“The market seems to have priced in the shock from the jobs

number … however, gold will have a tough time if the Fed is

seeing tightening much further,” said Edward Moya, senior

analyst with OANDA.

“Foreign investors are going to be looking for alternative

investments and gold is an option with the ongoing situation in

Taiwan and Ukraine.”

Gold fell on Friday after robust U.S. job growth reinforced

expectations that the Fed will continue to raise rates in the

next few meetings to slow inflation. [nL4N2ZH397

With gold’s gains capped by the potential of more aggressive

hikes, the strength of technical support around $1,700 will be

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tested when the Fed’s next decision is announced, Kinesis Money

analyst Rupert Rowling said in a note.

The U.S. consumer price index report due on Wednesday could

offer clues on the Fed’s next move.

Spot silver rose 3.7% to $20.60 per ounce, while

platinum was up 0.5% to $937.0.

Palladium jumped 5.6% to $2,245.68.

Reuters

2022-08-08 14:32:11

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