PRECIOUS gold margins are falling as the dollar uptrend weakens attractiveness

December 2 (Reuters) – Gold prices fell on Thursday, hurt by a firmer dollar as investors assessed how central banks are likely to react to rising inflation and economic growth concerns fueled by the new variant of Omicron coronavirus.

BASICS

* Spot Gold XAU = fell 0.1% to $ 1,780.36 an ounce by 0050 GMT. US gold futures GCv1 fell 0.1% to $ 1,782.50.

* The dollar index = USD held on, rebounding 0.4% from the previous session’s low, adding to the cost of gold for foreign currency buyers.

* The US Federal Reserve must be ready to respond to the possibility that inflation may not decline in the second half of next year, as most forecasters currently expect, Federal Reserve Chairman Jerome Powell said on Wednesday.

* The latest variant of COVID-19 could prolong some of the challenges and bottlenecks in the supply chain that led to higher inflation, and officials need to keep this in mind when deciding how to withdraw their monetary support, New York Fed Called President John Williams.

* Fewer incentives and rate hikes tend to drive government bond yields higher and increase the opportunity cost of zero-interest gold.

* The Fed has given up its longstanding claim that high inflation is temporary, but the Bank of England and the European Central Bank are not quite ready to follow their change of course.

* US manufacturing activity picked up in November on strong demand for goods and kept inflation high as factories continued to grapple with commodity shortages caused by the pandemic.

* SPDR Gold Trust GLD, The largest gold-backed exchange traded fund in the world, said its holdings fell 0.2% to 990.82 tons on Wednesday from Tuesday.

* Spot silver XAG = rose 0.3% to $ 22.37 an ounce. platinum XPT = up 0.2% to $ 935.48 while palladium XPD = rose 0.4% to $ 1,753.68.

DATES / EVENTS (GMT)

1,330 US initial jobless claims per week

(Reporting by Nakul Iyer in Bengaluru; editing by Rashmi Aich)

(([email protected]; within the US +1 646 223 8780, outside the US +91 80 6749 0417; Reuters Messaging: [email protected]))

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.