Gold eases off two-month peak as US dollar rises

Gold eases off two-month peak as US dollar rises
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BENGALURU (Nov 10): Gold prices slipped from a more than two-month peak on Wednesday (Nov 10) as an uptick in the US dollar hurt the bullion's appeal.

Spot gold fell 0.2% to US$1,827.05 (about RM7,583.17) per ounce by 0255 GMT after hitting its highest since Sept 3 earlier in the session.

US gold futures edged 0.1% lower to US$1,829.70.

The US dollar index edged up 0.1%, raising gold's cost to buyers holding other currencies.

Two of the US central bank's most dovish policymakers said on Tuesday they expect to get more clarity of the post-pandemic economic outlook by next summer, when the US Federal Reserve (Fed) is expected to finish winding down its asset purchases.

The Fed looks at a wide range of indicators in gauging how close the economy is to reaching full employment, Fed chair Jerome Powell said.

Eurozone inflation is likely to fall back below 2% late next year but the European Central Bank should prepare for a less benign scenario, avoiding long policy commitments as upside risks dominate, Dutch policymaker Klaas Knot said.

Easy monetary policy to spur economic growth amid the pandemic have propelled gold prices to new highs over the last two years as near-zero interest rates cut the opportunity cost of holding non-yielding bullion.

US producer prices increased solidly in October, driven by surging costs of gasoline and motor vehicle retailing, suggesting that high inflation could persist for a while amid tight global supply chains related to the Covid-19 pandemic.

China's factory gate prices rose at their fastest pace in 26 years in October, beating forecasts and further squeezing profit margins for producers already grappling with soaring coal prices and other commodity costs due to a power crunch.

Spot silver fell 0.1% to US$24.25 per ounce. Platinum eased 0.6% to US$1,052.68, while palladium rose 0.4% to US$2,027.97.