Gold struggles for direction as traders await fresh catalyst

Gold was little changed Wednesday as investors assessed mixed signals including a slightly weaker dollar, rising Treasury yields and more hawkish commentary from a Federal Reserve policymaker.

Bullion has had a tepid week so far, ekeing out modest gains as the greenback’s strength – a major headwind over recent months – fades slightly. Still, the US currency remains a headwind as the Federal Reserve pursues an aggressive monetary policy to battle inflation.

“I tend to think that Fed hawkishness is largely now ‘in the price’,” Philip Klapwijk, managing director of Hong Kong-based consultant Precious Metals Insights Ltd., said in an email. “That said, the scope for a near-term major rebound in gold prices is very limited while rates climb and the US dollar remains strong.”

Atlanta Fed President Raphael Bostic reiterated that the bank is focused on cooling inflation that’s running at its hottest in four decades. Treasury yields traded near multi-year highs ahead of US housing figures for September and the Fed’s Beige Book due later Wednesday.

Gold was flat at $1,651.49 an ounce by 10.34am Shanghai time. Silver was little changed, platinum fell and palladium gained. The Bloomberg Dollar Spot index was steady.