Gold gains on lower yields, traders await Powell’s remarks

Gold prices edged higher in early Asian hours on Thursday, helped by a dip in US Treasury yields, while investors looked forward to comments from U.S. Federal Reserve Chair Jerome Powell for more clues on interest rates.

FUNDAMENTALS

* Spot gold was up 0.2% at $1,953.74 per ounce by 0128 GMT after hitting its lowest since Oct. 19 on Wednesday. U.S. gold futures edged 0.1% higher to $1,959.10.

* Benchmark 10-year US Treasury yields held near their lowest in more than a month. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.

* Meanwhile, the dollar index held steady against its rivals after three sessions of gains.

* Powell did not comment on monetary policy or the economic outlook in prepared remarks at a U.S. central bank statistics conference on Wednesday. He is scheduled to speak at another conference on Thursday.

* A slew of Fed officials who spoke this week maintained a balanced tone on the central bank’s next decision, but noted they would focus on more economic data and impact of higher long-term bond yields.
* Futures point to a roughly 14% chance of another hike by January, but are pricing in an 18% chance that rate cuts could come as early as March, according to the CME FedWatch Tool.
* Lower interest rates boost the appeal of zero-yield bullion.

* The European Central Bank needs to see further progress in dampening inflationary pressures, and companies along with governments need to chip in to prevent more policy tightening, ECB policymakers said.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.03% to 867.28 tonnes on Wednesday.

* Spot silver fell 0.4% to $22.61 per ounce, while platinum gained 0.3% to $868.82. Palladium eased 0.3% to $1,047.16, hovering near its lowest level since 2018. DATA/EVENTS (GMT) 0800 EU EU finance ministers meet likely to continue discussions of changes to the EU debt and deficit rules 1330 US Initial Jobless Clm Weekly

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