Gold edges up on falling equities, easing dollar

Wednesday,   21-Jun-2017   02:58 PM (IST)

Gold inched up on Wednesday after hitting its lowest in five weeks in the previous session, buoyed as equities fell and the dollar eased from one-month highs following a tumble in crude oil prices. A renewed slump in oil markets to seven-month lows put Asian investors on edge, and pushed down U.S. Treasury yields and the dollar index against a basket of currencies. Spot gold was up 0.2 percent at $1,245.82 per ounce, as of 0801 GMT. U.S. gold futures for August delivery climbed 0.3 percent to $1,246.7 per ounce. However, the possibility of another interest rate hike by the U.S. Federal Reserve this year is underpinning the bearish outlook for the yellow metal. Meanwhile, the outlook for inflation and the future of financial stability are emerging as dueling concerns at the heart of a debate at the U.S. central bank over how fast to proceed on future interest-rate hikes. Dallas Fed President Robert Kaplan on Tuesday expressed doubt that short-term interest rates are very accommodative and said he wants to wait for more data to understand whether recent weak inflation readings are transitory as he suspects. Higher interest rates tend to boost the dollar and push bond yields up, pressuring gold prices by increasing the opportunity cost of holding non-yielding bullion. Russia's central bank posted an increase in gold reserves in May, the fifth consecutive month of gains. Among other precious metals, silver gained 0.1 percent to $16.47 per ounce, hovering near a six-week low hit in the previous session. Platinum slid 0.1 percent to $917.25 per ounce, while palladium was flat at $867.99 per ounce.