Gold prices subdued as resilient dollar dampens appeal

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Gold prices were subdued on Thursday

under pressure as the dollar hovered near a recent peak amid a

hawkish U.S. Federal Reserve, while cautious investors also

awaited the European Central Bank’s rate action due later in the

day.

FUNDAMENTALS

* Spot gold was down 0.1% at $1,717.38 per ounce, as

of 0135 GMT.

* U.S. gold futures were up 0.1% at $1,729.90.

* The dollar index was up 0.1%, not far from the

two-decade high touched in the previous session.

* Fed officials said on Wednesday they still aren’t

convinced the worst of the U.S. inflation scare has passed, in

comments that teed up a continuation of the central bank’s

aggressive interest rate increases.

* The U.S. central bank is expected to lift its policy rate

by another 50 or 75 basis points at its Sept. 20-21 policy meet.

* U.S. economic activity was unchanged in July through late

August, although companies reported some easing in labor

shortages and price pressures, a Fed report showed on Wednesday.

* Focus will be on the European Central Bank meeting, where

the central bank is widely expected to raise interest rates by

75 basis points on Thursday to fight runaway inflation.

* China held 62.64 million fine troy ounces of gold at the

end of August, unchanged from the end-July. The value of its

gold reserves fell to $107.49 billion at the end of August from

$109.84 billion at the end-July.

* Spot silver fell 0.4% to $18.43 per ounce, platinum

was 0.3% lower at $863.71 and palladium dropped

0.7% to $2,029.23.

DATA/EVENTS (GMT)

0130 Australia Trade Balance G&S July

1215 EU ECB Refinancing, Deposit Rates Sept

1230 US Initial Jobless Clm Weekly

1415 EU ECB President Christine Lagarde presents

the latest monetary policy decisions

(Reporting by Eileen Soreng in Bengaluru; Editing by Sherry

Jacob-Phillips)

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