Gold holds ground but on track for weekly fall

Bengaluru – Gold prices were steady on Friday, caught between a pullback in the dollar and growing uncertainty over the US Federal Reserve’s timeline to start tapering stimulus, with the precious metal heading to record a weekly decline.

Spot gold was little changed at $1,795.86/oz at 1.10am GMT and was down 1.6% for the week. US gold futures eased 0.2% to $1,797.20/oz.

The dollar index was flat after easing overnight alongside US Treasury yields.

US Federal Reserve bank governor Michelle Bowman added her voice to the growing number of policymakers who say the weak August jobs report will not throw off the central bank’s developing plan to trim its bond purchases later this year.

Chicago Fed president Charles Evans said on Thursday the US economy is “not out of the woods yet,” and challenges remain, including supply chain and labour market bottlenecks.

Gold is viewed as a hedge against inflation and currency debasement. The Fed’s tapering would tackle both those conditions thereby diminishing gold’s appeal.

Data showed on Thursday the number of Americans filing new claims for jobless benefits fell last week to the lowest level in nearly 18 months, offering more evidence that job growth was being hindered by labour shortages rather than cooling demand for workers.

Meanwhile, the European Central Bank will trim emergency bond purchases over the coming quarter, it said on Thursday, but was keen to stress it was not about to close the money taps.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell to 998.17 tonnes on Thursday from 998.52 tonnes on Wednesday.

Silver fell 0.3% to $24.01/oz and platinum rose 0.2% to $978.69/oz. Palladium gained 1.3% to $2,206.67/oz, bouncing off a more than one-year low of $2,143.69/oz touched in the previous session