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Gold was largely unchanged on Wednesday after falling over one percent in the previous session on hawkish comments from U.S. Federal Reserve Chair Janet Yellen, while lingering North Korea worries supported prices.
Spot gold inched 0.1 percent higher to $1,294.89 per ounce at 0425 GMT. In the previous session, prices fell 1.3 percent in what was the biggest loss in over two weeks.
U.S. gold futures for December delivery fell 0.3 percent to $1,297.80 per ounce.
"Gold lost what it gained on North Korea (tensions) since Friday after Yellen's comments, said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.
"But I think the (North Korea) situation is more serious than the Fed's policies. So, gold is supported around here and I expect prices to go back up to $1,300 an ounce."
On Tuesday, Yellen said the Fed needs to continue gradual rate hikes despite broad uncertainty about the path of inflation - remarks that acknowledged the central bank's struggles to forecast one of its key policy objectives.
Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.
A strong U.S. inflation reading could raise expectations for future interest rate increases. President Donald Trump warned North Korea on Tuesday that any U.S. military option would be "devastating" for Pyongyang, but said the use of force was not Washington's first option to deal with the country's ballistic and nuclear weapons program.
"The wild card, as usual, is the North Korea situation, something that is very hard to quantify at this stage," INTL FCStone analyst Edward Meir said in a note Geopolitical risks can boost demand for safe haven assets such as gold.
The dollar climbed to a one-month high and bond yields rose as risks grew for a U.S. interest rate hike in December, while Asian stocks hovered near multi-week lows as tensions in the Korean peninsula remain elevated.
The biggest focus for the market for Wednesday is the announcement of a tax plan by the U.S. administration and Republicans in Congress.
Among other precious metals, silver rose 0.3 percent to $16.82 per ounce. In the previous session, prices fell 2.4 percent, their biggest fall since mid-August Platinum gained 0.2 percent to $923.50 per ounce, after slipping about 2 percent in the previous session, its biggest decline since early July.
Meanwhile, palladium fell 0.1 percent to $913.40 per ounce.
Gold fell to its lowest in nearly six months on Wednesday as a higher dollar and a technical sell-off overwhelmed safe-haven buying spurred by fears of a trade war between the world’s top two economi
The Gulf Today
Gold fell on Friday after stronger than forecast US payrolls data boosted expectations that the Federal Reserve will press ahead with another US interest rate hike this month, lifting the dollar.
Gold prices fell for a second session on Monday after US President Donald Trump revived hopes that he would meet North Korean leader Kim Jong Un next month, lowering political tensions and demand for
The Gulf Today
Gold prices rose on Wednesday on uncertainty about trade talks between the United States and China, which boosted the metal’s safe-haven appeal, but a firmer dollar kept a lid on gains.
The strong dollar is proving too much of a headwind for gold. Hedge funds and other large speculators pared bullish bets on bullion to the lowest in more than two years as the metal fell below $1,300