Mining equipment is seen inside the vast open pit of the Batu Hijau copper and gold mine, run by Newmont Mining Corp, on Indonesia’s Sumbawa island.
LONDON: Gold steadied yesterday in line with the dollar as uncertainty over the timing of a US interest rate hike hemmed prices into a range, with traders awaiting US data and comment from a raft of Federal Reserve officials for further direction.
Signs of improving physical demand in major Asian consumers helped keep prices underpinned after they snapped three weeks of losses last week to rise 1.3 percent, analysts said.
Spot gold was at $1,266.05 an ounce by 0930 GMT, little changed from $1,266.25 late on Friday, while US gold futures for December delivery were down 70 cents an ounce at $1,267.00.
“Over the last three weeks we’ve had very much a rangebound environment,” Mitsubishi analyst Jonathan Butler said. “The strength of the dollar, which is a negative factor for gold, is in large part responsible for that. On the other side, physical demand in Asia has at least given some price support.”
“We have the November Fed meeting on the horizon, and the US election - those are the two big macro events,” Butler added. “But with a Democratic election victory, and no move on rates in November, nothing really changes for gold.”
The Fed is tipped to hike rates in December. Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
The US currency rallied to a near nine-month high against a currency basket in early trade, boosted by expectations the Fed will raise rates this year and a receding chance of Donald Trump becoming US president.
Third-quarter growth figures from the United States and Fed policymakers speeches due this week will be closely watched for clues on a possible interest rate hike.
