Gold prices dip on nerves before decision on Fed chair succession

NEW YORK/LONDON — Gold prices dipped on Tuesday as investors anxiously awaited news on the next head of the US Federal Reserve, while strong share markets and a calmer geopolitical environment sapped safe-haven demand.

“People are going into the equity markets and taking off their safe- haven plays,” said Phillip Streible, senior market strategist at RJO Futures in Chicago.

Gold futures may remain weak until Friday’s US gross domestic product figures are released, he added.

Spot gold was down 0.40% at $1,276.73 an ounce by 2:28 p.m. EDT (1828 GMT), after hitting its lowest since Oct. 6 at $1,271.86 in the previous session. Spot gold has shed 6% since touching a oneyear high of $1,357.54 on Sept. 8, largely due to a rebound in the dollar on expectations that the Fed will boost interest rates in December. “We’ll probably consolidate around $ 1,275-$ 1,285 until some Fed news comes out,” said a Hong Kong-based trader.

US gold futures for December delivery settled down $ 2.60, or 0.20%, at $1,278.30 per ounce.

US President Donald Trump told reporters on Monday he was “very, very close” to making his decision on who should chair the US central bank.

“If a hawkish candidate is chosen, gold futures would most likely come under renewed pressure,” Mr. Streible said.

A hawkish candidate would be expected to favor higher interest rates, boosting the value of the dollar and making greenback-denominated gold more expensive for holders of other currencies.

The Fed is expected to raise rates in December and twice next year, according to a Reuters poll of economists, who now worry that the central bank will slow its tightening because of expectations that inflation will remain low.

MSCI’s 47- country world share index hovered near its recent all-time highs after a drop in General Electric shares on Wall Street had seen the ViX volatility index spike up.

Among other precious metals, silver fell by 0.60% to $16.94 an ounce, after hitting its lowest since Oct. 9 in the previous session.

Platinum was up 0.40% at $ 924.40 an ounce while palladium was up 0.60% at $965 per ounce.

Palladium has more than doubled in value since touching a five-and-a-half-year low in January last year while platinum has gained only 15% in the same period. —