WEAKER DOLLAR LIFTS GOLD

GOLD TOUCHED a one-month high yesterday, as a dip in the dollar and US bond yields allowed investors to turn to bullion as an inflation hedge.

Spot gold price was up 0.1 percent to $1 795.05 (about R26 680) an ounce by 3.43pm, having earlier in the day hit its highest level since September 15 at $1 803.75 an ounce.

US gold futures gained 0.2 percent to $1 798.80 an ounce.

Gold also seemed to largely overlook data showing the number of Americans filing new claims for jobless benefits fell last week.

“Traders and investors are finally realizing that rising inflation is, historically, bullish for metals, no matter what the Federal Reserve does,” said Jim Wyckoff, senior analyst at Kitco Metals.

Further volatility in equities this month was also likely to spark some safe-haven demand for gold, Wyckoff added.

Sentiment in wider markets has remained fragile of late, as an energy crunch in key economies stoked fears that the resultant jump in prices may slow a post-pandemic economic revival.

Chinese producer prices posted a record annual increase last month and US consumer prices also increased solidly, fanning fears that central banks might unwind their economic support sooner than anticipated.

Minutes from the Fed’s September 21-22 policy meeting showed it could start reducing its stimulus by mid-November.

But “now that we’ve got a little bit of visibility on what the Fed intends to do in terms of tapering, and it’s a relatively small amount; that’s been positive for gold”, independent analyst Ross Norman said.

Meanwhile, spot silver price gained 0.8 percent to $23.24 an ounce, platinum rose 1.5 percent to $1 035.47 an ounce.

Palladium climbed 1.9 percent to $2 146.73 an ounce.