Gold ekes out gains as dollar rally takes a breather

• Gold prices edged higher on Tuesday after hitting a near one-month low in the previous session, helped by a slight pullback in the dollar although lingering worries over further aggressive U.S. interest rate hikes kept gains in check.
• Spot gold was up 0.2% at $1,738.90 per ounce, as of 0128 GMT, after hitting its lowest since July 27 at $1,727.01 on Monday. Spot silver gained 0.2% to $19.04 per ounce, platinum rose 0.3% to $877.70, and palladium climbed 1.5% to $2,023.10.

Gold prices edged higher on Tuesday after hitting a near one-month low in the previous session, helped by a slight pullback in the dollar although lingering worries over further aggressive U.S. interest rate hikes kept gains in check.

Fundamentals

Spot gold was up 0.2% at $1,738.90 per ounce, as of 0128 GMT, after hitting its lowest since July 27 at $1,727.01 on Monday.

U.S. gold futures gained 0.2% to $1,751.70.

The dollar eased 0.1% against its rivals after hitting a more than one-month high overnight, making gold less expensive for buyers holding other currencies.

U.S. central bank officials have “a lot of time still” before they need to decide how large an interest rate increase to approve at their Sept. 20-21 policy meeting, Richmond Federal Reserve President Thomas Barkin said last week.

Recent hawkish comments from Fed officials have dented bullion’s safe-haven appeal. Focus now turns to the Fed’s Jackson Hole, Wyoming, symposium due later this week.

Fed funds futures are now pricing in a 56.5% chance of a 75-basis-point rate hike by the Fed in September.

The European Central Bank must keep raising interest rates even if a recession in Germany is increasingly likely, as inflation will stay uncomfortably high all through 2023, Bundesbank President Joachim Nagel said over the weekend.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.15% to 987.56 tons on Monday from 989.01 tons on Friday.

Zijin Mining is restarting normal production at its Colombia gold mine, a spokesperson said on Monday, after people from the surrounding community ended more than a week of road blockades.

Spot silver gained 0.2% to $19.04 per ounce, platinum rose 0.3% to $877.70, and palladium climbed 1.5% to $2,023.10.