Gold hovered near $4,400 an ounce Thursday as rising Treasury yields and persistent Middle East tensions offset support from a softer dollar. Traders are watching this week's US inflation data and near-record gold ETF inflows for direction ahead of next week's Federal Reserve meeting.
Gold slipped Thursday as climbing Treasury yields and persistent Middle East tensions offset support from a weaker dollar, leaving the metal near the level it has held for weeks. Spot gold fell 0.2% to $4,392.61 an ounce. Gold futures slipped 0.6% to $4,435.25 an ounce.
Yields and oil add pressure
U.S. 10-year Treasury yields rose after Washington's plan to buy up to $6 billion of longer-dated debt fell short of some analysts' expectations for repurchases of as much as $10 billion. Higher yields weigh on gold because bullion pays no interest. At the same time, Brent crude touched $100 a barrel for the first time since July, a level that threatens to keep inflation elevated and persuade central banks to lift interest rates in response, according to Investing.com. Yahoo Finance tied the move to attacks on ships this week by the United States and Iran. Crude futures were trading at $101.97 a barrel.
Still, the U.S. dollar index sat near its weakest level in two weeks, a slide that can lift gold's appeal to overseas buyers, per Investing.com.
Inflation data and Fed meeting loom
Traders are watching Thursday's producer price index and Friday's consumer price index reports for clues on inflation ahead of the Federal Reserve's policy meeting next week. Swaps markets are pricing about a 65% probability of a rate hike this month. December gold futures opened Thursday at $4,448 a troy ounce, down 0.3% from Wednesday's close. The contract eased to $4,439.70 by 6:35 a.m. ET.
ETF demand hits records
Investor demand for gold has strengthened. Global gold-backed ETFs attracted $18 billion in August, their second-largest monthly inflow on record, according to the World Gold Council. Holdings rose by 121 tonnes to a record 4,189 tonnes. Assets under management climbed 16% to $615 billion. North American funds recorded their third-largest monthly inflow on record. European-listed funds posted their largest ever monthly inflow.
Zooming out, gold has climbed 22.7% over the past year, according to Yahoo Finance. The metal is also up 2.6% over the past month.
Sources: Commodities & Futures News, Yahoo Personal Finance
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