GOLD UP ON WEAKER DOLLAR

GOLD FIRMED on a retreat in the dollar yesterday, as investors awaited US inflation data and clarity on when the Federal Reserve might start tapering economic support measures.

Spot gold price gained 0.2 percent to $1 893.38 (about R25 398) an ounce by 5.26pm. US gold futures were up by 0.3 percent to $1 896.60.

Gold rose over 1 percent on Friday after a weaker-than-expected US monthly jobs report calmed fears about the Fed reining in monetary stimulus in the near future.

While gold is pretty bullish, US Treasury secretary Janet Yellen’s comments were keeping a lid on prices, said Bob Haberkorn, senior market strategist at RJO Futures.

Yellen said on Sunday that President Joe Biden’s $4 trillion spending plan would be good for the US even if it contributed to rising inflation and results in higher interest rates, Bloomberg News reported.

“The big thing people are waiting for is the Fed’s plan is on easing and also on (interest) rates,” and if the Fed remains quiet over the next week or two ... you could see a move north of $1,900,” RJO’s Haberkorn said. Failure to break above $1,900 could push it down, dependent on the Fed’s stance, she added.

The dollar index fell, boosting bullion’s appeal for those holding other currencies. Inflation will remain in focus, with the US consumer price index report due on Thursday, and central bank meetings scheduled in Europe and Canada.

Longer to medium term, “we might see more volatility on equity markets, which will be increasing the value of gold as a safe haven (and) as inflation protection,” Commerzbank analyst Eugen Weinberg said.

Silver rose 0.3 percent to $27.86 an ounce, palladium shed 0.5 percent to $2,830.02, while platinum advanced 0.4 percent to $1 166.67.