Gold prices rose on Thursday as a softer US dollar supported demand for the precious metal, while investors awaited US inflation data that could provide further clues on the Federal Reserve’s interest-rate path.
Spot gold rose 0.5% to US$4,423.81 an ounce as of 6.59am GMT, while US gold futures for December delivery gained 0.2% to US$4,467.90.
The dollar remained subdued, making gold and other greenback-priced metals cheaper for investors holding other currencies.
Marex analyst Edward Meir said the weaker dollar was currently a more important driver for gold than geopolitical developments in the Persian Gulf.
“For now, the geopolitical developments in the Persian gulf are of secondary importance to gold. Gold instead is teeing off on a weaker dollar, which notably is not moving up despite the fact that U.S. rates are going higher,” he said.
Market attention is now turning to US producer price data due later on Thursday, followed by consumer inflation figures on Friday. The readings could influence expectations for the Fed’s interest-rate decisions.
Meanwhile, RHB Research said COMEX gold’s latest price action remained positive, with the commodity moving closer to the US$4,500 level.
The research house said COMEX gold opened at US$4,365.40 before falling to an intraday low of US$4,350.50, then climbing to a high of US$4,444.30 and closing at US$4,426.70.
RHB said the latest bullish candlestick suggested selling pressure had eased, while the 50-day simple moving average continued to provide downside support.
It maintained a positive trading bias as long as gold remains above the key US$4,300 support level, with US$4,500 identified as the immediate resistance, followed by US$4,700.
RHB advised traders to maintain the long position initiated at US$4,273.30, with a stop-loss at US$4,300. The next downside support is at US$4,150.
Gold also continues to receive support from concerns over US fiscal pressures. ANZ senior commodities strategist Daniel Hynes said confidence in the long-term value of US government debt and the dollar was being undermined by rising fiscal pressures.
The geopolitical backdrop remains volatile, with Iran saying it had attacked 10 ships near the Strait of Hormuz after the US sank five Iranian oil tankers.
Among other precious metals, spot silver rose 0.4% to US$67.52 an ounce, while platinum fell 0.8% to US$1,881.56 and palladium was unchanged at US$1,353.55.
