Gold Edges Up After Two Days Of Losses On Reduced Rate-Cut Bets

Gold edged higher, halting two days of losses spurred by fading optimism the US Federal Reserve will cut interest rates next month.

Bullion was trading around $4,100 an ounce on Monday, having lost more than 2% in the previous session. Expectations for another rate cut were scaled back last week as Fed officials showed little conviction for reducing borrowing costs. Lower interest rates typically make non-yielding bullion more appealing to investors.

A faction of Fed policymakers has stepped up warnings that inflation progress could slow or stall, with some – including Kansas City Fed chief Jeff Schmid and Boston head Susan Collins – speaking out against another rate cut in December. Others appear undecided: Atlanta President Raphael Bostic said "we'll see" about a December reduction.

Precious metals, meanwhile, are finding support from the prospect of the Fed injecting further liquidity into the financial system and a pivot to looser monetary policy. Barclays Plc now expects the Fed's reserve management purchases of Treasury bills to begin in February, sooner than previously forecast.

Gold rose 0.3% to $4,097.22 an ounce as of 8:00 a.m. in Singapore. The Bloomberg Dollar Spot Index was little changed. Silver gained, while palladium and platinum were flat.

Source: Bloomberg Europe