Gold price falls as dollar recovers, Fed chair in focus

October 31, 2017

New York (Oct 31)  Spot gold slipped by 0.5 percent to $1,269.69 an ounce by 1424 GMT, on course to finish October with a second straight monthly decline.

U.S. gold futures for December delivery dipped 0.6 percent to $1,270.40.

The dollar brushed off Monday's news that investigators had charged U.S. President Donald Trump's former campaign manager Paul Manafort, resuming the upward trend that has helped it towards its best month since February.      

The U.S. Federal Reserve will begin a two-day policy meeting later this session, with speculation mounting that President Trump will pick Fed Governor Jerome Powell as the next head of the U.S. central bank on Thursday.             

Powell is seen as more dovish than other contenders for the post, such as Stanford University economist John Taylor. "With Powell being a dove, it kind of keeps the status quo, so we still see the dollar going higher from here, but in a gradual fashion. That's likely to be a source of modest downward pressure for gold," said Martin Arnold, commodity strategist at ETF Securities.   

A strong U.S. currency makes dollar-priced gold more expensive for holders of other currencies.

Global equities, meanwhile, were heading for a record 12th

month of gains as a 5-1/2 month high in European stocks and

records elsewhere underscored one of the most robust bull

markets on record.

Rising equity markets usually indicate confidence in

economic growth, which reduces gold's appeal as a safe-haven


    Elsewhere, continuing political unrest in Catalonia was also

in focus for gold, along with U.S. payrolls data on Friday and a

Bank of England policy meeting on Thursday.

    "The market is catching its breath for what will be a very

data-heavy second half of the week," said Jeffrey Halley, a

senior market analyst with OANDA.

    "Gold itself appears to have lost any risk-aversion premium

for now and is thus completely at the mercy of the nuances of

the U.S. bond and stock market, and by default the U.S. dollar."

    Among other precious metals, silver fell 0.8 percent

to $16.69, platinum dipped 0.5 percent to $916.40 and

palladium climbed 1.5 percent to $978.50.   

South Africa's Impala Platinum said on Tuesday that

first-quarter platinum production fell 6.6 percent due to a

stock build-up after scheduled furnace maintenance at its Impala

and Zimplats operations.


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