Gold prices inch up from one-week low
Gold prices inched up on Wednesday from a one-week low with the dollar holding steady, but speculation that President Donald Trump might pick a policy hawk to lead the U.S. Federal Reserve weighed on the metal.
Spot gold was up 0.1 percent at $1,286.11 an ounce at 0350 GMT. It hit a one-week low of $1,281.31 in the previous session.
U.S. gold futures for December delivery rose 0.2 percent at $1,288.20 per ounce.
"This morning is about President Xi talking and headlines coming out of that... we`re seeing a bit of pullback (in the dollar) that`s helping gold this morning in Asia," a Hong Kong-based trader said.
Asian shares consolidated recent gains and currencies kept to tight ranges on Wednesday as investors waited to see what policies might emerge from China`s Communist Party conference.
"I would expect gold to stay gently bid in Asia in case of some surprise headlines," Jeffrey Halley, a senior market analyst with OANDA, said.
The dollar was steady against a basket of currencies with investors weighing the possibility that Trump will choose a more hawkish Federal Reserve chief than current chair Janet Yellen.
"All the rhetoric around that is that it`s more hawkish... Just few surprises hitting the market there and helping the dollar regain footing and keeping yields very steady, so really putting gold under pressure," the trader said.
Trump has a pool of five candidates to choose from for the next Fed chair and is likely to announce his choice before going to Asia in early November, a source familiar with the situation said on Tuesday.
Jerome Powell will likely be the next Federal Reserve chairman, according to a slim majority of economists in a Reuters poll - but most of them said current Fed Chair Janet Yellen would be the best option.
The U.S. central bank is widely expected to raise interest rates for the third time this year in December.
Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.
"$1300 was a very big psychological level. Just technically we needed to close above it a few times and we failed. The 100 DMA around $1,275 is kind of a big support level," the trader said adding that some buying could come in around $1260-75.
In other precious metals, silver rose 0.4 percent to $17.05 an ounce, after touching a one-week low in the previous session.
Platinum rose 0.3 percent to $932.60 an ounce, while palladium was 0.5 percent higher at $983.00 an ounce.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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