Gold opened the week higher as traders pared bets on the Federal Reserve raising interest rates this month, after remarks by Chair Kevin Warsh. Bullion was trading around $4,180 an ounce, after falling 0.7% the week before. Traders unwound bets on the probability of a quarter-point hike to less than one-in-five after comments by the Fed chair were interpreted as supporting the case to keep rates on hold when it meets next week.
Higher borrowing costs are a headwind for gold, which doesn't pay interest. A hot US inflation print last week had spurred expectations for US hikes, boosting the dollar, but Warsh's comments halted its gains. The Bloomberg Dollar Spot Index was little changed after falling 0.3% last week.
Gold has held above the key $4,000-an-ounce support threshold since August, with its status as a safe haven asset providing a floor since a war-driven slump pushed it into bear territory earlier this year. It is still down around a fifth since the US-Iran conflict erupted in late February.
Spot gold rose 0.4% to $4,180.97 an ounce at 7:35 a.m. in Singapore, while silver gained 0.6% to $57.33. Platinum and palladium advanced.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing