Gold steadies after hitting 2-week low as dollar retreats

US gold futures fell 0.3 per cent to US$1,846.80. PHOTO: REUTERS

BENGALURU (REUTERS) - Gold prices stabilised on Monday (Nov 22) after hitting their lowest in nearly two weeks, as a retreating dollar lent some support to the metal.

Spot gold was little changed at US$1,845.48 per ounce by 12.55 am GMT. United States gold futures fell 0.3 per cent to US$1,846.80.

The dollar index fell 0.1 per cent, retreating from Friday's (Nov 19) high. A weaker dollar reduces bullion's cost to buyers holding other currencies.

Federal Reserve policymakers are publicly debating whether to taper asset purchases more quickly with one of the central bank's most influential officials signalling on Friday that the idea will be on the table at the Fed's next meeting.

Bundesbank president Jens Weidmann publicly contradicted the European Central Bank's (ECB) official line on Friday, warning that inflation may stay above 2 per cent for some time and that the ECB should avoid any commitment to keeping the money taps open.

A hike in interest rates should reduce bullion's appeal as higher rates raise the non-interest bearing metal's opportunity cost.

The White House said there will be more to report on US President Joe Biden's choice for the next Fed chairman early this week.

Indicative of sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.8 per cent to 985 tonnes on Friday from 976.87 tonnes on Thursday (Nov 18).

Speculators raised their net long Comex gold futures and options positions to 164,043 in the week to Nov 16, while net long positions in Comex silver also increased, the US Commodity Futures Trading Commission said on Friday.

Physical gold demand in major Asian hubs softened last week, although Indian dealers looked to the upcoming wedding season for renewed interest in bullion.

Spot silver fell 0.1 per cent to US$24.57 per ounce. Platinum eased 0.6 per cent to US$1,025.33 and palladium dropped 0.7 per cent to US$2,047.13.

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