Gold Rallies on Weaker Dollar, But Rate Hike Fears Persist
Gold prices have recovered slightly after two days of losses as a weaker US dollar helped bullion rise. Spot gold gained 0.6% to $4,429.89 an ounce in early Asian trading, while December US gold futures were little changed at $4,475.10.
The dollar index fell about 0.4%, making bullion cheaper for buyers using other currencies. However, the precious metal remains below its late-August highs after stronger-than-expected US payrolls revived expectations for tighter monetary policy.
Ole Hansen, a commodity strategist at Saxo Bank, said that the employment report had lifted bond yields and reinforced expectations of a September rate rise, creating pressure on both gold and silver. He noted that higher interest rates generally hurt gold because it offers no yield.