LONDON: Gold rose yesterday as the dollar steadied though analysts said the likelihood of higher US rates later this year was likely to keep prices under pressure, while oversupply pushed platinum to its lowest since April.
Spot platinum fell to $937.25 earlier, its lowest since touching $936.81 on April 6, before rising 0.1 percent to $946.20 an ounce at 1355 GMT. Spot gold was up 0.1 percent at $1,257.3 an ounce. Last week it fell to $1,241.20, its lowest since early June as speculators cut bets on higher prices. US gold futures was up 0.2 percent $1,258.4. Traders were looking ahead to the minutes of the Federal Reserve’s September policy meeting due at 1800 GMT. Higher US rates could boost the US currency which when it rises makes gold more expensive for holders of other currencies.
“We need the minutes to see what the thinking is on timing, but it is clear the Fed will raise rates this year,” Quantitative Commodity Research analyst Peter Fertig said.
“Today the dollar index appears to be steadying, that is a support, but the dollar is generally stronger and that will weigh on precious metals.”
Analysts said investors who typically buy gold as a hedge against political and financial uncertainty were shunning it and that was reflected in holdings in physically backed exchange traded funds, which have plateaued overall this week at above 57 million ounces.
“The drying up of safe-haven demand, the risk of profit-taking and the outlook for a stronger US dollar suggest further pressure on prices. The US elections are the wild card to watch,” Julius Baer analysts said in a note. Platinum and palladium have come under renewed pressure since the National Union of Mineworkers signed a two-year wage agreement with Impala Platinum, effective July 1 to June 2018.
Investors are shunning platinum because they are not convinced stocks have shrunk enough to justify a return to the market. Holdings of platinum-backed exchange traded funds fell this month to above 1.9 million tonnes, their lowest since mid 2013. Palladium rose 0.9 percent to $653.6 an ounce after earlier touching a low of $643.72, its lowest since July 19. Silver gained 0.4% to $17.51 an ounce.
