Gold hits one-week low on dollar bounce

29 June, 2021 12:00 AM printer

Gold hits one-week low on dollar bounce

BENGALURU: Gold prices slipped to a one-week low on Monday, weighed down by a bounce in the dollar and mixed signals from the US Federal Reserve on monetary policy tightening despite tame inflation data.

Spot gold was down 0.2 per cent to US$1,777.03 per ounce by 2.49am GMT, after hitting its lowest since June 21 at US$1,770.36 earlier in the session. US gold futures shed 0.2 per cent to US$1,774.80, report agencies.

“The jury’s still out (on the Fed’s timeline on tapering),” said IG Market analyst Kyle Rodda.

“On one hand, we’ve to think about normalising policy, but on the other, a lot of Fed speakers are suggesting inflation will be transitory, so we don’t need the Fed to slam on the brakes. And, that is kind of sending mixed signals.”

Gold prices rose as much as 0.8 per cent on Friday after data showed the US personal consumption expenditures price index, the Fed’s preferred inflation measure, came in below expectations.

Minneapolis Fed President Neel Kashkari said he expected recent high inflation readings would not last.

The dollar rebounded from Friday’s lows, making gold expensive for holders of other currencies.

The market is trading in a range and until gold breaks above US$1,800 or below US$1,760, it’s just looking like a sideways trend in the short term, Mr Rodda said.

Investors were also keeping a close watch on the negotiations over an US infrastructure deal.

Silver was steady at US$26.07 per ounce, palladium rose 0.1 per cent to US$2,640.31. Platinum eased 0.7 per cent to US$1,103.40.