Gold flat as US dollar holds firm on Fed taper bets

Gold flat as US dollar holds firm on Fed taper bets
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BENGALURU (Oct 12): Gold traded flat in early Asian trade on Tuesday as the dollar held firm on expectations that the Federal Reserve will announce a tapering of its bond purchases next month.

Spot gold was unchanged at $1,753.77 per ounce by 0123 GMT, while U.S. gold futures were little changed at $1,754.90.

The dollar hovered close to a one-year high touched last month amid surging energy prices and expectations the U.S. central bank would soon start normalising policy.

Gold is seen as a hedge against inflation and currency debasement likely from the widespread stimulus. The Fed's tapering could tackle both those conditions, diminishing bullion's appeal.

The current bout of inflation in the euro zone is not a trigger for monetary policy action as growth in services prices and wages remains weak, European Central Bank chief economist Philip Lane said on Monday.

Russia's Nornickel, the world's largest producer of palladium, has cut its deficit estimate for the global palladium market this year and next year due to the flagging recovery of the auto sector, a senior executive told Reuters.

Spot silver fell 0.2% to $22.52 per ounce, while platinum dropped 0.5% to $1,003.87.

Palladium was down 0.4% to $2,103.16, having hit its highest since Sept. 10 at $2,182.67 on Monday.