Gold is hardly changed after taking big strides in previous session

Bengaluru — Gold prices held steady on Thursday, after rising nearly 1% in the previous session, as the dollar slipped further from a 16-month peak hit earlier in the week.

Spot gold was little changed at $1,211.12/oz at 4.53am GMT. US gold futures inched up 0.1% to $1,211.7/oz.

“There’s going to be a bid to gold, provided the dollar continues to slide,” said Stephen Innes, Asia-Pacific trading head at Oanda in Singapore.

The dollar index , which measures the greenback against a basket of six major currencies, traded at 96.84, off a 16-month high hit on Monday.

“We could see further slide in the dollar since we didn’t get any follow through on the bullish consumer price index effect,” Innes said.

US consumer prices increased by the most in nine months in October amid gains in the cost of petrol and rents, pointing to steadily rising inflation that is likely to keep the Federal Reserve on track to raise interest rates again in December.

Gold has fallen more than 11% from a peak in April as investors flock to the dollar, with US-China trade friction unfolding against a backdrop of higher US interest rates. Higher US interest rates tend to boost the dollar and also push up bond yields, reducing the appeal of non-yielding bullion.

“For gold, $1,200 is providing a good support and the market could trade firmer from here,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

Meanwhile, Asian stocks rose on Thursday, supported by a bounce in Chinese shares on news that Beijing has delivered a written response to US trade demands, raising hopes the two sides could resume negotiations to end their trade war.

Spot gold may extend its bounce to $1,223/oz, following its stabilisation around a support at $1,195, said Reuters technical analyst Wang Tao.

Among other precious metals, silver was up 0.1% at $14.14/oz. The metal fell to its lowest level since January 21 2016 at $13.85 in the previous session.

Platinum dipped 0.6% to $829.75/oz, while palladium fell 0.1% to $1,123.24/oz.

Reuters