* Gold will vanish as rally begins – Analyst
* Fed may start reducing stimulus by mid-November – minute (adds comment, updates prices)
October 14 (Businesshala) – Gold prices held steady near a one-month high on Thursday, as a softer dollar countered rising hopes that the Federal Reserve will tighten its policy earlier than expected.
Spot gold was marginally lower at $1,792.10 an ounce as of 0727 GMT. A sharp depreciation in the dollar and the benchmark US 10-year Treasury yield from recent highs propelled prices on Wednesday to the highest level since Sept. 16 at $1,795.81.
US gold futures ended 0.1% lower at $1,792.60.
Han Tan, chief market analyst at Axinity, said: “Markets have become accustomed to the Fed’s tapering narrative, so it will be interesting to see whether bearish fears can be offset by bearish sentiment as the primary driver of gold prices moving forward.” Will be done.”
He said the resurgent Treasury yield could lead to a further rise in gold once the Fed officially kicks off its tapering process.
US consumer prices rose solid in September and are likely to rise further amid rising energy prices. This could put pressure on the Fed to act quickly to normalize policy.
Minutes of the Fed’s September meeting showed that the central bank could start reducing stimulus by mid-November. While a growing number of policymakers were concerned that high inflation could persist longer than thought, they were divided on how quickly they might need to raise rates in response.
The dollar index was down 0.1% on the day, while benchmark yields were creeping up.
Jeffrey Haley, a senior market analyst for Asia-Pacific at OANDA, said: “I expect the US dollar and long-dated rates to resume their climb sooner rather than later, and the sooner the gold rally starts, the better.” It will soon disappear.”
Lower central bank incentives and higher interest rates boost government bond yields, which translates into a higher opportunity cost for holding no-interest gold.
Spot silver rose 0.3% to $23.13 an ounce, platinum rose 0.7% to $1,027.15 and palladium climbed 1.7% to $2,141.84. (Reporting by Eileen Soreng in Bengaluru; Editing by Amy Karen Daniels and Subhranshu Sahu)