Gold rises against weak dollar

Gold gained as the dollar weakened amid continued uncertainty over whether the US central bank will maintain its resolve to crush inflation by hiking rates.

The precious metal has been whipsawed by changing views on the Federal Reserve’s monetary policy stance.

It had gained almost 4% in the first two trading sessions of the week amid disappointing US data but slipped as much as 1.5% on Wednesday after fresh figures showed the American economy remains resilient.

The greenback strengthened after the US data, putting gold under pressure, before easing back on Thursday.

Fed officials have continued to reiterate their hawkish stance on interest rates while inflation remains high, though that failed to quell expectations of cuts in 2023.

The inflation outlook became even murkier after the OPEC+ alliance agreed to the biggest oil production cut since 2020.

That could fan global price pressures once again, which had been easing partly because of declining crude prices.

“The Fed’s case has not changed since the cycle began in March 2022; slashing inflation is more important than growth itself,” Tom Price, an analyst at Liberum wrote in a note.

“This stance offsets any price upside from ongoing energy-related inflation shocks.”

Thursday’s initial jobless claims data will provide the latest gauge of the strength of the labour market, ahead of the much-awaited nonfarm payrolls print later in the week.

The latter could be pivotal for gold, which is at a crucial juncture technically.

Spot gold rose 0.5% to $1,724.09 an ounce as of 8:53 a.m. in London, following Wednesday’s 0.6% dip.

The Bloomberg Dollar Spot Index declined 0.2%. Silver, palladium and platinum gained.