Gold inched up on Tuesday on t0 back of a slightly weaker dollar, but traded in a tight range amid possibilities of an early announcement on the next US Federal Reserve chair.
Spot gold was up 0.1 per cent at $1,282.80 an ounce by 0337 GMT, after hitting its lowest since October 6 at $1,271.86 in the previous session. US gold futures for December delivery rose 0.3 per cent to $1,284.60 per ounce.
“Nothing really spurring a big selloff for gold yet. We're waiting for currency direction... maybe people are anxious about an early announcement from Trump on the Fed chair,” said a Hong Kong-based trader.
Next Fed chief
The dollar slipped against a basket of major currencies and the yen , after climbing to a more than three-month high against the latter in the previous session, as attention turned to who would be the next Fed chairman.
President Donald Trump told reporters on Monday he is “very, very close” to making his decision on who should chair the Fed.
He is said to be considering Fed Governor Jerome Powell and Stanford University economist John Taylor for the position. Current Chair Janet Yellen, whose term expires in February, was one of the five candidates Trump interviewed for the job.
A less hawkish candidate would be expected to favour lower interest rates, reducing the value of the dollar and making the greenback-denominated metal cheaper for holders of other currencies.
The Fed will raise interest rates in December and twice next year, according to a Reuters poll of economists showed, who now worry that the central bank will slow its tightening because of expectations that inflation will remain low.
“I'm very surprised we're up here. Risk is still on if you look at stock markets. Generally gold should be lower... I was expecting gold to drift down to $1,260 area,” said the Hong Kong-based trader.
“We'll probably consolidate around $1,275-$1,285 until some Fed news comes out.”
Reuters technicals analyst Wang Tao, however, said spot gold may break a resistance at $1,283 per ounce and rise into a range of $1,289-$1,295.
Silver was up 0.6 per cent at $17.14 an ounce, after hitting its lowest since October 9 in the previous session. Platinum was up 0.8 percent at $928.05 per ounce and palladium rose 0.6 per cent at $964.25 an ounce.