Gold prices fall as dollar firm lessens appeal of safe-havens

Gold prices were subdued on Monday as the dollar held firm, as cautious investors awaited US consumer price readings expected this week that could be crucial to the Federal Reserve’s decision to exit of its super-support policy.

Spot gold was flat at $ 1,787.40 an ounce at 0114 GMT after posting a weekly decline of 2.1%.

US gold futures fell 0.3% to $ 1,786.90.

The dollar index strengthened slightly in Asian trade, recording a weekly gain of 0.6%, making gold more expensive for holders of other currencies.

Data on Friday showed producer prices in the United States rose sharply in August, leading to the largest annual increase in nearly 11 years.

The reading pushed up the benchmark 10-year US Treasury yield.

While some investors view gold as a hedge against higher inflation, higher yields translate into a higher opportunity cost for holding non-interest bearing bullion.

Cleveland Fed Chairman Loretta Mester said on Friday she would still like the central bank to start cutting asset purchases this year, joining the chorus of policymakers making it clear that their plans to start cutting back on asset purchases. support had not been derailed by weaker employment growth in August.

Physical demand for gold in India was subdued last week despite a correction in bullion prices, while consumers in most other Asian hubs also remained on the sidelines as they hoped for a clearer trend in global prices.

Speculators reduced their net long positions in COMEX gold from 15,324 contracts to 83,540 during the week ended September 7, according to data from the United States Commodity Futures Trading Commission.

Platinum fell 0.1% to $ 955.01 an ounce and hit its lowest level since November 2020.

Palladium hit its lowest level since August 2020, but recovered lost ground to trade up 0.3% to $ 2,145.03.

Silver was stable at $ 23.72.