Gold price rises as dollar hits one-and-a-half week low

The price of gold rose on Tuesday due to the weakening of the dollar, although bets on a new interest rate hike by the United States Federal Reserve weighed on the attractiveness of the metal – which does not bear interest – and limited its gains.

At 08:44 GMT, spot gold was up 0.2% at $1,653.90 an ounce, while US gold futures were down 0.3% at $1,658.60.

“Any gains (in gold) are temporary, until the market discounts that the Fed is going to slow its pace of tightening”, said Giovanni Staunovo, an analyst at UBS.

Although a weaker dollar helped gold, bullion prices are expected to hit $1,600 by the end of the year amid high inflation in the United States and as the Fed continues to pursue an aggressive tightening of monetary policy, he said. Staunovo.

The dollar index hit a 1-1/2 week low, while sterling soared after the UK’s drastic reversal of its tax cut plan rattled global markets.

The price of gold is down nearly 10% so far this year as US rate hikes have boosted bond yields and the dollar, while increasing the opportunity cost of holding the metal. gold, considered a hedge against inflation.

Also, another Fed rate hike of 75 basis points is expected next month, following red-hot inflation data in September.

In other precious metals, spot silver was up 0.3% at $18.73 an ounce; platinum gained 0.1% to $916.38; and palladium was up 0.9% at $2,017.84.

With information from Reuters