Gold consolidated near the level of the opening of the session, due to some reduction in tension over Catalonia after the leader of the autonomy Pujdeme postponed the Declaration of independence of the region from Spain.
Meanwhile, some support for the precious metals had a negative dynamics of the US dollar.
The US dollar index showing the ratio of the dollar against a basket of six major currencies, was down 0.22% to the level of 93,19. The weakening of the dollar generally positively affects the value traded in U.S. dollars of the precious metal, increasing the demand from investors for foreign currency.
“Concerns about the impact of the Catalan referendum on independence fade, providing some support for the Euro and causing the dollar’s weakening,” said Jens Pedersen, senior analyst at Danske Bank in Copenhagen.
Investors are also awaiting the release of minutes from the September FOMC meeting, which may clarify the prospect of potential interest rate hike. “However, there is a small chance that the protocols will have a significant impact on gold, as they will probably just maintain expectations that the US Central Bank will raise rates in December, for the third time this year,” said Pedersen.
Futures on rate FRS-tracked by the CME Group indicate that investors assess the probability of another rate hike this year, 86,7% vs. 87.8% in the day before. Recall, gold is very sensitive to growth rates and yields, because in this situation, increase the opportunity cost of ownership is not interest earning gold, while increasing the value of the dollar in which it is evaluated. However, a gradual increase in rates carries less of a threat to gold prices, than a series of drastic changes.
The cost of October gold futures on COMEX is $1286,20 per ounce.
Vitali Nesterenko, an analyst at TeleTrade