Gold price drifts higher as dollar eases over Catalan relief
London (Oct 11) Gold edged higher on Wednesday after Catalonia's leader balked at making a formal declaration of independence from Spain,
sending the euro higher and the dollar down.
The dollar index fell to the lowest in over a week,making dollar-priced gold cheaper for buyers using other currencies.
"These concerns about the ramifications of the Catalan independence referendum are fading, giving some support to the euro and weakening the dollar," said Jens Pedersen, senior analyst at Danske Bank in Copenhagen.
Spot gold was up 0.2 percent at $1,289.40 an ounce by 1000 GMT while U.S. gold futures for December delivery
eased 0.2 percent to $1,291.70 per ounce.
Investors were awaiting minutes from the U.S. Federal Reserve's latest meeting, due to be released at 1800 GMT, for clues on the outlook for potential interest rate rises.
But there is scant chance they will have a major impact, Pedersen said, since they probably will merely support expectations that the U.S. central bank will raise rates in December, for a third time this year.
Gold is highly sensitive to rising interest rates, as these
increase the opportunity cost of holding non-yielding bullion,
while boosting the dollar, in which the metal is priced.
Gold's rise was lacklustre, however, with tensions over
North Korea failing to worry markets.
"Even news that the U.S. had flown two B-1 aircraft over the
Korean peninsula failed to raise the market from its lethargy,"
said Jeffrey Halley, senior market analyst at OANDA.
The U.S. military flew two strategic bombers over the Korean
peninsula in a show of force late on Tuesday, as President
Donald Trump met top defence officials to discuss how to respond
to any threat from North Korea.
In other precious metals, silver rose 0.3 percent to
$17.13 an ounce, having hit a three-week high in the previous
session.
Platinum dipped 0.1 percent at $928.20 an ounce and palladium was trading 0.2 percent higher at $935.10 an ounce.
Reuters
