Gold firms on doubts over Fed rate path

Gold firmed yesterday, supported by uncertainty over the future pace of US interest rate hikes and the outcome of the G20 summit later this week when political leaders will focus on global trade tensions. Spot gold was up 0.1 percent to $1,223.28 per ounce at 11:03 a.m. EST (1603 GMT). US gold futures were steady at $1,223.40 per ounce. US President Donald Trump and his Chinese counterpart Xi Jinping are expected to discuss their trade dispute at the G20 summit in Argentina.

“If Trump and Xi can’t come to an agreement at the G20 meeting, I think you will see a pause in the US Federal Reserve’s rate increases next year... which in turn will help gold prices go higher,” said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals. Uncertainties related to Brexit and Italy are also helping build a base for gold, which was helped by a slight retreat in the dollar earlier in the session, he added.

The euro gained against the dollar on signs Italy may cut its budget deficit target to satisfy the European Union, while the sterling rose after the EU and Britain sealed a Brexit deal. Analysts remain cautious, however, as the Brexit deal faces stiff opposition in the British parliament. Among other precious metals, silver gained 0.3 percent to $14.28 an ounce and platinum rose 0.2 percent to $840.19. Palladium climbed 2.7 percent to $1,148.90 an ounce. Prices fell about 3 percent in the previous session, their biggest one-day percentage decline since Aug. 15.