BENGALURU. — Gold edged up yesterday as a recent dip to multi-week lows attracted some bargain hunters, but prices were well within recent ranges as the dollar remained on an upward trajectory.
Spot gold edged 0,3 percent higher to $1 191,41 per ounce at 1129 GMT, having fallen to a more than six-week low of $1 180,34 on September 28. US gold futures rose 0,2 percent to $1 194,10.
“It is unusual that gold is trading higher even with the stronger dollar. People are looking to buy into gold as they believe that prices below $1,200 are indeed attractive,” Julius Baer analyst Carsten Menke said.
A higher dollar makes bullion more expensive for holders of other currencies, curtailing demand.
Analysts said the market was likely to stay relatively range-bound, with no real catalyst to break out on either side.
“One thing in gold’s favour is oil is around $85 and that will actually make investors use gold as a hedge against inflation risk,” Mitsubishi analyst Jonathan Butler said.
Global benchmark Brent crude oil prices held near 4-year highs as markets braced for tighter supply due to US sanctions on Iran. Gold can sometimes be seen as a hedge against oil-led inflation.
Gold has fallen for the past six months, losing 13 percent, largely due to dollar strength, with the US currency benefiting from a vibrant US economy, rising US interest rates and fears of a global trade war.
Market participants are also on the lookout for any additional clues on the pace of interest rate hikes from US Federal Reserve Chairman Jerome Powell, who will be speaking on “The Outlook for Employment and Inflation” before the National Association for Business Economics later in the day.
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