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Bookmark LONDON, Aug 16 Gold rose 1.2 percent on Tuesday
after the dollar fell to a seven-week low as traders reined in
U.S. interest rate rise bets following dovish comments from a
Federal Reserve policymaker.
Spot gold rose to a session high of $1,355.10 an
ounce and was up 1.1 percent at $1,353.55 by 1211 GMT.
U.S. gold rose 0.9 percent to $1,359.40 an ounce.
Spot gold was within reach of the more than two-year high of
$1,374.91 hit last month as investors sought refuge from
volatility across financial markets following Britain’s vote to
leave the European Union.
Most of the metal’s gains were attributed to a weak dollar,
which fell 1 percent against a basket of main currencies. A
lower dollar makes gold cheaper for foreign-currency holders.
The trigger for its weakness and, in turn, gold’s strength
was a paper from San Francisco Fed President John Williams
arguing that central banks might have to raise inflation
targets, focus more on growth and back much looser fiscal policy
in future.
Markets will monitor U.S. data later in the day including
consumer prices, housing starts and industrial output for
another chance to gauge the health of the economy.
High on the U.S. calendar this week are also the minutes of
the last Federal Reserve meeting.
“The Fed should reiterate their data dependency, that in the
uncertainty they would want to see inflation and wage targets
… given that the data has been lukewarm, apart from the July
jobs data, December now seems the only opportunity for this
year,” Societe Generale analyst Robin Bhar said.
“If the market believes that, then gold is going to stay
underpinned for the whole period,” he said.
The metal was also helped by lower European shares, which
pulled back from seven-week highs.
Soros Fund Management LLC cut its shares in gold sharply in
the second quarter, while New York-based Paulson & Co, led by
John Paulson, kept its stake in SPDR Gold Trust unchanged, U.S.
Securities and Exchange Commission filings showed on
Monday.
Silver was up 1.3 percent at $20.08 an ounce.
Platinum, which hit a near three-week low of
$1,105.50 earlier in the session, rebounded 2.3 percent to
$1,132.50.
Palladium was up 1.1 percent at $700.80. It hit a
three-week low of $679.72 on Monday.
By Clara Denina
August 16, 2016
