PRECIOUS-Gold firms as inflation risks persist

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(iterates, adds comment and updates prices)

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* The ECB president is due to speak later on Wednesday

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* Gold faces strong resistance near $1,870 – Analyst

Nov 17 (Businesshala) – Gold prices rose on Wednesday as inflation concerns kept some investors on edge, while hopes rising prices could prompt central banks to raise interest rates, bolstering the dollar. did and limited Bullion’s advance.

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Spot gold rose 0.6% to $1,860.21 an ounce as of 0912 GMT. US gold futures rose 0.5% to $1,862.40.

“Investors are afraid of inflation getting out of control and are therefore buying gold to hedge against that risk,” said Carlo Alberto de Casa, external analyst at Kinesis Money.

De Casa added that a rate hike remains a potential risk for gold and that only a clear break above $1,875 could extend further gains.

Higher interest rates increase the opportunity cost of holding interest-free gold.

Falling in gold, the US dollar, which competes with gold as a safe-haven of value, strengthened after better-than-expected US retail data made the metal costly for overseas buyers.

Ajay Kedia, director of Kedia Commodities in Mumbai, said: “The price should come down to $1,830 due to statements from Fed members regarding the dollar rising and interest rate hikes in 2022. But don’t expect a steep drop.”

The US Federal Reserve this month began phasing out its bond-buying and is expected to end purchases entirely by the middle of 2022. Its next policy-making meeting is in mid-December.

“The more positive economic data you get, the faster the interest rate hike is going to be,” said Harshal Barot, Senior Research Consultant, South Asia at Metals Focus.

St. Louis Fed Chairman James Bullard urged a quick end to asset purchases to put the Fed in a position to raise rates as soon as spring.

The focus is also on a speech by ECB President Christine Lagarde later on Wednesday.

Spot silver rose 1.13% to $25.08 an ounce, platinum rose 0.8% to $1,069.33 and palladium rose 0.1% to $2,161.68. (Reporting by Arundhati Sarkar and Nakul Iyer in Bengaluru Editing by Robert Birsel)


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