Gold edges higher as dollar slips from 20-year high


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Gold prices inched up in early Asian

hours on Tuesday, as the dollar eased off a 20-year high,

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offsetting pressure from expectations of the U.S. Federal

Reserve keeping interest rates higher for longer to combat

inflation.

FUNDAMENTALS

* Spot gold ticked 0.1% higher to $1,739.14 per

ounce, as of 0058 GMT. Prices hit a one-month low of $1,719.56

on Monday, following Fed Chair Jerome Powell’s hawkish remarks

at Jackson Hole symposium on Friday.

* U.S. gold futures rose 0.1% to $1,751.7.

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* The dollar index was off a two-decade high hit on

Monday, while the benchmark 10-year yields pulled

back from a two-month high hit in the previous session.

* The message from the world’s top finance chiefs is loud

and clear: rampant inflation is here to stay and taming it will

take an extraordinary effort, most likely a recession with job

losses and shockwaves through emerging markets.

* While gold is considered a safe bet during economic

uncertainty, interest rate hikes increase the opportunity cost

of holding the non-yielding asset.

* Minneapolis Fed President Neel Kashkari said on Monday he

felt the stock market selloff that followed Powell’s hawkish

speech on Friday shows investors understand the central bank is

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serious about reducing inflation.

* Markets are now largely pricing in a 75-basis-point rate

hike at the Fed’s September meeting.

* SPDR Gold Trust , the world’s largest gold-backed

exchange-traded fund, said its holdings fell 0.38% to 980.61

tonnes on Monday from 984.38 tonnes on Friday.

* Spot silver dipped 0.1% to $18.73 per ounce,

platinum fell 0.2% to $862.72 and palladium rose

0.4% to $2,155.68.

DATA/EVENTS (GMT)

0130 Australia Building Approvals July

0130 Australia Building Approvals Total YY July

0900 EU Consumer Confid. Final Aug

1200 Germany CPI, HICP Prelim YY Aug

1400 US Consumer Confidence Aug

(Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi

Aich)

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