(iterates, adds comment and updates prices)
* US retail sales up in October
* The ECB president is due to speak later on Wednesday
* Gold may retest technical support at $1,849/oz
November 17 (Businesshala) – Gold prices edged higher on Wednesday but hovered near recent lows, with a stronger US dollar taking some of the precious metal’s sheen away.
Spot gold rose 0.2% to $1,854.07 an ounce as of 0.443 GMT, but the metal was still down about 0.3% from its lowest level since a fall in the previous session last Friday. US gold futures rose 0.1% to $1,856.00.
Harshal Barot, Senior Research Consultant, South Asia, Metals Focus, said, “The macro background is still supportive for gold and inflation is still on the rise, but the continued strength in the dollar is limiting gold’s rally.”
The dollar was near a 16-month high, supported by data showing a jump in US retail sales last month. The strengthening of the dollar increases the price of gold for buyers holding other currencies.
The report suggested that high inflation was still not driving spending, even though concerns over rising costs sent consumer sentiment to a 10-year low in early November.
“The more positive economic data you get, the faster the stakes are going to rise for interest rate hikes,” Barot said, adding that the European Central Bank’s (ECB) soft stance also supported the dollar, leading to an increase in bullion prices. Headwinds increased.
ECB President Christine Lagarde said later on Monday that tightening monetary policy to curb inflation could affect the euro area’s recovery.
Gold, often viewed as inflation-hedging, has benefited from easing monetary policy during the pandemic, but any increase in rates should reduce the appeal of bullion as higher interest rates offer opportunities for the non-interest-bearing metal. increase the cost.
Elsewhere, spot gold could take support at $1,849 an ounce and a break below that could drop to $1,831, according to Businesshala technical analyst Wang Tao.
Spot silver rose 0.6% to $24.94 an ounce. Platinum rose 0.3% to $1,064.30 and palladium rose 0.2% to $2,161.75. (Reporting by Nakul Iyer in Bengaluru; Editing by Rashmi Aich)