Gold was little changed on Thursday after dipping to its lowest since February in the previous session, with the dollar holding around 9-month highs against the yen after a rally in oil prices. Spot gold was mostly unchanged at $1,172.24 an ounce by 0046 GMT. The metal hit its lowest since Feb. 8 at $1,170.35 in the previous session.
US gold futures were flat at $1,170.90 per ounce. The U.S. dollar was broadly firm, hitting 9-1/2 month highs against the yen as oil prices surged after OPEC agreed to output cuts – lifting inflation expectations and U.S. bond yields. US private employers stepped up hiring in November and consumer spending increased last month, the latest signs of economic strength that could further cement the case for an interest rate hike from the Federal Reserve next month. With the US economy making good progress toward full employment and inflation heading toward the Fed’s 2-percent goal, it is time for an interest-rate increase, Dallas Fed Bank President Robert Kaplan suggested on Wednesday.
The post-election enthusiasm for US stock funds is waning, while a strong dollar helped push commodity funds to their largest withdrawals in more than three years, Investment Company Institute data showed on Wednesday. Global investors raised their bond exposure and held cash at high levels in November, citing uncertainty around U.S. President-elect Donald Trump’s plans and worries about political risk in Europe, a Reuters monthly poll showed on Wednesday. Trump’s victory in the U.S. presidential election has increased the threats to the world economy from higher interest rates and less trade, the Bank of England said on Wednesday.
Euro zone inflation hit a 31-month high in November, data showed on Wednesday, providing modest relief for the European Central Bank ahead of an interest rate decision next week as price growth finally ticks up after years of flirting with deflation. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.13 percent to 883.86 tonnes on Wednesday from 885.04 tonnes on Tuesday.