Gold prices edge lower on steady dollar, Fed rate-hike jitters

Gold prices inched lower on Wednesday as the dollar steadied, while the U.S. Federal Reserve’s commitment to tightening monetary policy also weighed on zero-yield bullion’s appeal.

FUNDAMENTALS

* Spot gold was down 0.1% at $1,650.75 per ounce, as of 0125 GMT.

* U.S. gold futures were up 0.1% at $1,657.30.

* The dollar index was a tad bit higher in early Asian hours, having bounced off its lowest level since Oct. 6 overnight.

* The U.S. central bank may need to push its benchmark policy rate above 4.75% if underlying inflation does not stop rising, Minneapolis Fed President Neel Kashkari said on Tuesday.

* Production at U.S. factories rose in September indicating the manufacturing sector remains on reasonable footing despite the Fed’s efforts to hamper demand and lower inflation.

* Although traditionally seen as a hedge against inflation, interest rate hikes to control soaring prices have reduced bullion’s appeal since it yields no interest.

* Delegates from around the world meeting at the London Bullion Market Association’s annual precious metals conference in Lisbon predicted that gold prices would rise to 1,830.50 an ounce in a year’s time, up from around $1,650 on Tuesday.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 0.29 tonnes on Tuesday.

* Russia’s central bank sees no need in raising gold holdings in its gold and forex reserves, its deputy governor, Alexei Zabotkin said on Tuesday, shrugging off a plea from the gold miners to increase state purchases amid Western sanctions.

* Spot silver eased 0.2% to $18.72 per ounce, platinum was 0.3% higher at $909.88 and palladium rose 0.3% to $2,019.75.

DATA/EVENTS (GMT)

0600 UK CPI YY Sept

0900 EU HICP Final MM, YY Sept

1230 US Housing Starts Number Sept

1800 US The Federal Reserve issues

the Beige Book of economic condition