Gold prices were steady in early Asian trading on Thursday as investors assessed the likelihood of the US Federal Reserve raising interest rates again this year.
Spot gold was little changed at $4,285.31 an ounce by 00:22 GMT, while US gold futures for December delivery were also steady at $4,321.40 an ounce.
US Treasury prices fell on Wednesday, sending yields sharply higher after a stronger-than-expected purchasing managers’ report.
Rising inflation pressures and an improving economy appear to be supporting expectations that the Federal Reserve could raise interest rates again ahead of the closely watched midterm elections. According to the FedWatch tool, traders are increasingly betting on a second consecutive monetary policy tightening in late October.
S&P Global said Wednesday that its preliminary US Composite PMI Output Index, a closely watched gauge of business activity, jumped this month to its highest level since July 2021. The sub-index measuring prices paid by businesses for inputs also rose to its highest level in nearly four years.
Although gold is generally viewed as a hedge against inflation, higher interest rates reduce its appeal because the metal does not generate income.
Meanwhile, a senior Iranian official told Reuters that Iran and the United States remain far apart on how to end their war, but diplomatic efforts should continue. The comments came after the Iranian president told the UN General Assembly that Tehran would never yield to US pressure.
US President Donald Trump welcomed Chinese President Xi Jinping to Washington at the start of a three-day visit.
Among other precious metals, spot silver fell 0.6% to $64.08 an ounce, platinum was steady at $1,749.47, while palladium rose 0.2% to $1,261.95.
Source: Reuters
