Gold set for worst month in seven as traders bet on higher US rates

Gold prices on Friday braced for their biggest monthly fall since February, hovering around levels at over six-month lows on the prospects of higher-for-longer U.S. interest rates ahead of a widely watched U.S. inflation print due later in the day.

FUNDAMENTALS

* Spot gold was up 0.1% at $1,866.41 per ounce by 0020 GMT, set for a nearly 4% decline this month and its second consecutive quarterly drop. U.S. gold futures rose 0.3% to $1,883.50.

* The dollar retreated from a 10-month high, while Treasury yields were off a 16-year peak. But both were still headed for their best quarters in four.

* The U.S. economy maintained a fairly solid pace of growth in the second quarter and activity appears to have accelerated this quarter.

* Federal Reserve Bank of Richmond President Thomas Barkin said on Thursday it’s unclear whether more monetary policy changes will be needed in coming months.
* Higher rates raise the opportunity cost of holding bullion, which is priced in dollars and does not yield any interest. * The Democratic-led U.S. Senate forged ahead on Thursday with a bipartisan stopgap funding bill aimed at averting a fourth partial government shutdown in a decade, while the House prepared to vote on partisan Republican spending bills with no chance of becoming law.

* Britain’s job market has cooled from recent peaks, but still remains tight in many areas, recruiters said.

* Markets await the August personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, due at 1230 GMT.

* Spot silver firmed 0.2% to $22.65 per ounce, but was also set for its worst month in seven.

* Platinum gained 0.4% to $908.02 and palladium steadied at $1,272.31. Both are poised to squeeze out quarterly gains, if trend holds. DATA/EVENTS (GMT) 0600 UK GDP QQ, YY Q2 0645 France CPI (EU Norm) Prelim YY Sept 0755 Germany Unemployment Chg, Rate SA Sept 1230 US Consumption, Adjusted MM Aug 1230 US Core PCE Price Index MM, YY Aug 1230 US PCE Price Index MM, YY Aug

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This article was originally published by Indiatimes.com. Read the original article here.