Gold inches higher

BENGALURU. — Gold inched up yesterday after hitting its lowest in five weeks in the previous session, buoyed as equities fell and the dollar eased from one-month highs following a tumble in crude oil prices.

A renewed slump in oil markets to seven-month lows put Asian investors on edge, and pushed down US Treasury yields and the dollar index against a basket of currencies.

“It’s mostly the dollar (supporting gold). It is a little bit weaker than yesterday’s closing,” said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.

Spot gold was up 0,3 percent at $1 246,25 an ounce by 4.23am GMT, after dropping as far as $1 241 in the previous session.

US gold futures for August delivery climbed 0,3 percent to $1 247,50 per ounce. Gold was also being supported by a bout of short-covering following its recent weakness, OCBC analyst Barnabas Gan said.

However, the possibility of another interest rate hike by the US Federal Reserve this year was underpinning the bearish outlook for the yellow metal, he said.

Meanwhile, the outlook for inflation and the future of financial stability are emerging as duelling concerns at the heart of a debate at the US central bank over how fast to proceed on future interest-rate hikes.

Dallas Fed president Robert Kaplan on Tuesday expressed doubt that short-term interest rates were very accommodative and said he wanted to wait for more data to understand whether recent weak inflation readings were transitory, as he suspected. — Reuters.