Dubai: Gold held its losses on Wednesday as hot US inflation data and hawkish Federal Reserve remarks strengthened bets on a December rate hike. Bullion traded near $4,030 an ounce after falling 2.6 per cent in the previous session. Spot gold edged up 0.85 per cent to $4,057.01 as of 11:00 am Dubai time.
In the UAE, 24K gold is being priced at Dh487.75 per gram versus Dh495.75 yesterday, 22K at Dh451.50, 18K at Dh371.25 and 14K at Dh289.50 versus Dh294.25 in the previous close. That leaves 24K down Dh8 per gram, or 1.6 per cent, in one day.
Traders now fully price a quarter-point Fed hike in December. The US consumer price index for October came in hotter than expected on November 10. Treasury yields and a dollar gauge held steady after surging that day. Higher borrowing costs weigh on gold because it pays no interest. A stronger dollar would make it costlier for most buyers.
According to Bloomberg, Chicago Fed President Austan Goolsbee called the October report “borderline disturbing”. “We’ve got a real inflation issue on our hands,” he said. Dallas Fed President Lorie Logan sees the need for at least two quarter-point increases, possibly at a quicker pace than this fall. Governor Christopher Waller earlier floated a half-point hike in December.
