Gold inches higher on softer dollar, yields

Gold prices edged up on Thursday, as the eased and U.S. bond yields retreated from a three-week high, lifting bullion’s appeal.

FUNDAMENTALS

* Spot gold rose 0.1% to $1,869.45 per ounce by 0046 GMT, after hitting a fresh over five-month peak on Wednesday. U.S. gold futures gained 0.1% to $1,871.50.

* The dollar fell 0.1%, pulling away from a 16-month peak scaled on Wednesday. A weaker dollar reduces bullion’s cost to buyers holding other currencies.

* Benchmark U.S. 10-year Treasury yields were modestly up on Thursday but retreated from a three-week high hit in the previous session, lowering non-yielding gold’s opportunity cost.

* Chicago Federal Reserve President Charles Evans on Wednesday reiterated that it will take until the middle of next year to complete the Fed’s wind-down of its bond-buying program even as the central bank checks to see if high inflation recedes as he expects.

* British inflation has hit a 10-year high as household energy bills rocket, bolstering expectations the Bank of England will raise interest rates in December.

* The European Central Bank must be ready to rein in inflation in the euro zone if it proves more durable than forecast, ECB board member Isabel Schnabel said.

* A hike in rates should reduce bullion’s appeal as higher interest rates raises the non-interest bearing metal’s opportunity cost.

* Indicative of sentiment, holdings in the SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, rose about 0.1% to 976.87 tonnes on Wednesday.

* Spot silver rose 0.2% to $25.11 per ounce.

* Global silver demand will rise to 1.029 billion ounces this year, exceeding a billion ounces for the first time since 2015, the Silver Institute said in a report.

* Platinum gained 0.3% to $1,059.98 and palladium rose 0.3% to $2,193.69.