Gold price edged higher on Monday, as the dollar weakened, although gains were capped on concerns about aggressive interest rate hikes by the US Federal Reserve.
The point yellow was up 0.2% at $1,662.40 an ounce, by 0852 GMT. US gold futures were stable at $1,672.30.
The dollar fell 0.3% against its rivals, making greenback-denominated bullion cheaper for overseas buyers.
“The US dollar correction at the moment has pushed gold up a bit,” said Ross Norman, an independent analyst.
On Friday, the Fed’s No. 2 official added her full endorsement of the US central bank’s longer-term higher game plan for interest rates to curb inflation.
Last month, the Fed raised policy rate rose 75 basis points, the third consecutive increase of that size and signaling more big bull runs to come this year.
Gold is very sensitive to US interest rate hikes, as this increases the opportunity cost of holding unprofitable.
Bullion prices fell more than 8% in the July-September quarter, marking their worst quarterly performance since late March 2021.
Looking ahead, investors await Friday’s US nonfarm payrolls data and a flurry of manufacturing activity. PMI data to gain insight into the health of the global economy.
“Warmer payrolls (payroll) readings may be preferred by gold bulls for recovery, but the lack of any pause,” said IG market strategist Yeap Jun Rong. Any of the Fed’s policies could still suggest that the overall downtrend is still intact.”
Elsewhere, spot silver rose 2.1% to $19.40 an ounce.
“It looks like it’s being covered by silver right now, which means the current rally may not be sustainable,” Norman said.
Platinum rose 0.6% to $864.13 an ounce and palladium rose 1.3% to $2,184.91.