Gold ticks higher, set for weekly gain on softer dollar

Gold prices edged up on Friday and were on track for a weekly gain, supported by a weaker dollar, although gains were kept in check as hawkish comments from the U.S. Federal Reserve officials doused hopes for an interest rate cut in December.

FUNDAMENTALS

• Spot gold was up 0.2% at $4,180.57 per ounce, as of 0127 GMT. Bullion is up 4.5% so far this week.
• U.S. gold futures for December delivery eased 0.3% to $4,183.40 per ounce.
• The dollar index was heading for a second straight weekly fall against its rivals, making gold more attractive for other currency holders.
• Meanwhile, citing worries about inflation and signs of relative stability in the labor market after two U.S. interest rate cuts this year, a growing number of Fed policymakers are signaling reticence on further easing.
• Last month, the Fed lowered interest rates by 25 basis points, but Chair Jerome Powell signalled caution over another rate cut this year, in part due to the lack of data.
• Traders are currently pricing in a 51% probability of a quarter-point rate cut from the Fed next month, down from 64% in the previous session.
• Non-yielding gold tends to do well in a low-interest-rate environment and during economic uncertainties.
• The U.S. government reopened after a record 43-day shutdown that had worried investors and disrupted the flow of economic data.
• SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.22% to 1,048.93 metric tons on Thursday, from 1,046.64 tons on Wednesday.
• Elsewhere, spot silver rose 0.6% to $52.64 per ounce, platinum gained 0.6% to $1,589.80, and palladium gained 0.6% to $1,435.20.