(Reuters) – Gold prices ticked higher on Wednesday, supported by a pullback in the dollar, although investors were focused on the U.S. Federal Reserve outlook on future pace of interest rate hikes as the central bank’s policy meeting concludes later in the day.
FUNDAMENTALS
* Spot gold was up 0.2% at $1,650.13 per ounce, as of 0100 GMT, while U.S. gold futures also gained 0.2% to $1,652.10.
* The dollar index edged 0.1% lower, making the greenback-priced gold less expensive for holders of other currency.
* U.S. job openings unexpectedly rose in September, suggesting demand for labour remained strong, providing evidence that rapid interest rate hikes have yet to bite hard in the real economy.
* Investors widely expect the Fed will raise its benchmark overnight interest rate by 75 basis points, the fourth such increase in a row.
* Gold is highly sensitive to rising U.S. interest rates, as that increase the opportunity cost of holding the non-yielding metal and boosts the dollar.
* Global factory output weakened in October as widespread recession fears, high inflation and China’s zero-COVID policy hurt demand, business surveys showed on Tuesday, adding to persistent supply disruptions and darkening recovery prospects.
* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.16% to 919.12 tonnes on Tuesday from 920.57 tonnes on Monday.
* Spot silver fell 0.1% to $19.63 per ounce, having hit a three-week peak on Tuesday. Platinum rose 0.4% to $946.18 and palladium was 0.5% higher at $1,889.47.
DATA/EVENTS (GMT)
0850 France S&P Global Mfg PMI Oct
0855 Germany S&P Global/BME Mfg PMI Oct
0855 Germany Unemployment Chg, Rate SA Oct
0900 EU S&P Global Mfg Final PMI Oct
1800 US Federal Open Market Committee announces
its decision on interest rates followed by statement
(Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips)
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