Oct 25 (Reuters) – Gold prices were little changed on Tuesday, as the dollar steadied and offset limit support for bullion from lingering expectations that the US Federal Reserve may slow the pace of interest rate hikes.
Spot gold 0.1% to USD 1,646.79 per ounce by 0735 GMT, while US gold futures eased 0.1% to USD 1,652.50 per ounce.
The dollar index found some footing due to a plunge in China’s yuan, shaking off pressure from bets of a less hawkish Fed and a firmer sterling asprepared to become Britain’s prime minister.
Gold competes with the dollar a safe store of value and gains in the currency also make bullion unattractive for overseas buyers.
But propping up gold to some extent, the market is sensing that the Fed is leaning towards the end of the aggressive part of the rate hike cycle, Stephen Innes, managing partner at SPI Asset Management said.
The central bank might be prepared to take a wait-and-see stance after the next few hikes, Innes added.
While the Fed appears set to deliver anotherinterest rate hike at its next policy meet, policymakers are seen debating the .
Higher interest rates increase the opportunity cost of holding the zero-yield bullion, while boosting the dollar and bond yields.
“Gold is at last finding some relative stability above USD 1,600,” said Clifford Bennett, chief economist at ACY Securities.
Should pressures from stronger dollar and some sovereign selling dissipate over coming months, gold could move significantly higher towards USD 1,850 to USD 2,200 over much of 2023, Bennett added.
Meanwhile, hGLD, the world’s largest gold-backed exchange-traded fund, recorded their first inflow after six straight days of declines.Trust
Spot silver fell 0.7% to USD 19.12 per ounce, platinum eased 0.3% to USD 921.63 and palladium rose 1.2% to USD 1,991.27.
(Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi Aich, Neha Arora, Editing by Louise Heavens)
This article originally appeared on reuters.com