|Published : 24 Nov 2016, 21:16:51|
Gold steadies on dollar, but US rate prospects weigh
LONDON, Nov 24 (Reuters): Gold steadied on Thursday as the dollar retreated slightly from an almost 14-year high hit on positive US economic data, which increased expectations of the Federal Reserve increasing interest rates in December.
Fed policymakers appeared confident on the eve of the US presidential election that the economy was strengthening enough to warrant rate increases soon, minutes from the central bank's Nov. 1-2 meeting showed.
Spot gold was up 0.1 per cent at $1,188.33 an ounce by 1109 GMT. It dropped 2 per cent in the previous session and touched its lowest since Feb. 8 at $1,180.99 overnight.
US gold futures eased by 0.1 per cent to $1,188.10.
With US markets out for the Thanksgiving holiday, trade is expected to thin down later in the day. Spot prices have dropped nearly 12 per cent from a high of $1,337.40 on Nov. 9, when Donald Trump was announced US president-elect.
"The expectation that Trump's election would lead to a longer risk-off period in financial markets was soon overtaken by the perception that he would be able to boost growth and that inflation would be accompanied by rising interest rates, which raised a bearish scenario for gold," said Julius Baer analyst Carsten Menke.
"At least in the short term there is some consolidation due in the dollar and US Treasury yields, and this is something that should provide gold (with) some support," he added. "Still, the big risk would be continued selling of investor physical holdings."