Gold supported by weaker US dollar

The spot gold price stayed supported during Asian trading hours on Thursday after the US dollar retreated.

Spot gold was last at $1,324.60-1,325.00 per ounce, up $2.15 from Tuesday’s close. Trading ranged at $1,322.55-1,325.40 so far.

After running up to a one-week high of 95.67 on Tuesday, the US dollar index has eased to as low as 95.27 on Thursday. It was last at 95.32, down 0.05 percent.

In US data released on Wednesday, import prices month-over-month in August came in at -0.2 percent, missing the forecast of -0.1 percent.

A string of US data are due later today, this includes core retail sales, PPI, Philly Fed manufacturing index, retail sales, unemployment claims, core PPI, current account, Empire State manufacturing index, capacity utilisation rate, industrial production and business inventories.

Investors are preparing for the Federal Reserve to start its September meeting next Tuesday, where the Federal Open Market Committee’s statement will be released on the afternoon of September 21.

Over the past two weeks before a media blackout, Fed members have given mixed messages on growth, the global economy and the removal of accommodative policy.

Market participants on Wednesday see the odds of a September rate increase at just 15 percent, according to the CME Group FedWatch tool. But majority now only sees a rate hike happening in February next year – consensus a day ago was that this could take place in December.

“The precious metals look set to continue to consolidate while awaiting further information. We expect volatility to return as the September FOMC meeting nears but strong directional moves may well have to wait until after the meeting,” Andy Farida, an analyst at FastMarkets, said.

“With gold trading comfortably above $1,300, the general mood suggests that underlying sentiment is positive,” he said.

In other commodities, the Brent crude oil spot price rose 0.12 percent to $46.02 per barrel, while the Texas light sweet crude dipped 0.18 percent to $43.62 recently.

Trading is expected to remain quiet on Thursday and Friday during Asian trading hours as Chinese investors are away for Mid-Autumn festival holidays.

In other precious metals, silver was last at $19.02/19.045, down $0.075. Platinum was up $$4.50 to $1,035/1,040, while palladium gained $5.50 to $653/660 recently on Thursday.

(Additional reporting by Ewa Manthey)

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