Gold edges up as dollar softens

Gold prices were buoyed by a subdued dollar on Tuesday after soft US economic data raised hopes that the US Federal Reserve could begin to slow monetary policy tightening later in the year.

Spot gold rose 0.2% to $ 1,651.85 an ounce, by 4.31am GMT, while US gold futures inched 0.1% higher to $ 1,655.70. The dollar index was flat on the day, hovering close to Friday’s low amid bets on less hawkish Fed and firmer sterling after Rishi Sunak was set to become Britain’s next prime minister. The market is sensing that the US Fed is getting towards the end of the aggressive part of the rate hike cycle and maybe prepared to take a wait- and- see stance, said Stephen Innes, managing partner at SPI Asset Management. “Once the US yields and dollar start to turn significantly low, that should be very positive for gold,” he said. An S& P Global survey showed US business activity contracted for a fourth straight month in October, the latest evidence of an economy softening in the face of high inflation and rising interest rates.[