Gold prices rise but remain on shaky ground

Gold stabilized on Thursday after two days of losses, helped by a slight decline in the dollar, but the gains were contained by expectations of a quick reduction in monetary support from the Federal Reserve.

As of 0920 GMT, spot gold was up 0.2% to $ 1,729.26 an ounce, while US gold futures were up 0.5% to $ 1,730.70.

Bullion is being offered a respite from the halt to the dollar’s rise, according to Han Tan, chief market analyst at Exinity.

But the greater prospects for the Fed’s gradual reduction in bond purchases, now expected to begin in November, and the chances that Treasury yields will continue to rise would put further downward pressure on the precious metal, Tan added. .

The dollar index slowed its advance, but expectations that the Fed would begin to reduce its stimulus this year kept the currency near its highest level in a year, diminishing the attractiveness of gold for holders of other currencies, heading to the metal to a quarterly fall of 2.2%.

Reduced stimulus from the US central bank and increases in interest rates tend to raise government bond yields, raising the opportunity cost of holding non-interest bearing bullion.

Among other precious metals, silver was up 0.5% at $ 21.62 an ounce. Platinum was up 0.4% at $ 954.31 and palladium was up 1.8% at $ 1,891.02.