Gold rises slightly on lower oil prices, subdued dollar

Gold inched higher on Friday as lower oil prices and a subdued US dollar offered support, while market participants kept their focus on developments in the Middle East and the outlook for global monetary policy.

FUNDAMENTALS

Spot gold was up 0.3% at $4,352.60 per ounce, as of 0050 GMT. US gold futures for December delivery were down 0.2% at $4,391.60.

Oil prices fell 1%, while the dollar remained subdued after retreating from recent highs. A weaker dollar makes greenback-priced commodities less expensive for holders of other currencies.


The Federal Reserve raised interest rates on Wednesday and flagged more hikes in the coming months. Updated quarterly economic projections showed 16 of 18 policymakers anticipate at least one more quarter-percentage-point hike by the end of this year.

Goldman Sachs kept its end-2027 gold price forecast at $5,400 per troy ounce despite the latest US interest rate increase, saying tighter policy is likely to slow bullion's rally but not derail it.

Although gold is traditionally viewed as a hedge against inflation, higher rates can curb its demand by increasing the appeal of yield-bearing assets.

The Bank of England kept interest rates on hold on Thursday but warned they might have to go up. The Bank of Japan is set to raise rates to a 31-year high on Friday and pledge to deliver more to counter inflation risks.

Data showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, though the decline was likely exaggerated by the Labor Day holiday, with the underlying trend pointing to continued labour market stability.

Spot silver rose 0.7% to $65.64 per ounce, platinum gained 0.9% to $1,785.55 and palladium added 0.1% at $1,292.47.

DATA/EVENTS (GMT)

0600 UK Retail Sales MM, YY Aug

0600 UK Retail Sales Ex-Fuel MM Aug

1315 US Industrial Production MM Aug N/A Japan JP BOJ Rate Decision 18 Sep