Gold on Tuesday rose above a seven-week low as the US dollar came off its highs. Bullion was pressured earlier by strong US economic data that reinforced expectations of another US interest rate increase this year and pushed the dollar and US bond yields higher.
Spot gold was up 0.1 percent at $1,272.04 per ounce by 3:13 p.m. EDT (1913 GMT), after the dollar flattened and US bond yields eased from earlier highs. Gold had earlier touched $1,267.76, its lowest since Aug. 15 and down more than 6 percent from a one-year high of $1,357.54 in early September.
"The speculators don't want to take it below key levels, because of uncertainty of the next Fed chair and how inflation will play out after a potential December hike," said Ryan McKay, head of commodity strategy at TD Securities in Toronto, referring to the modest rebound in gold prices. US gold futures for December delivery settled down $1.20, or 0.1 percent, at $1,274.60 per ounce, after hitting the lowest in nearly a month at $1,271.
The CME's Fedwatch indicator showed markets were pricing in a 77 percent likelihood of a December rate rise after Monday's data showed a surge in US manufacturing activity. Silver was up 0.4 percent at $16.60 an ounce but still near its lowest since Aug. 9. Platinum was up 0.2 percent at $912.40 per ounce, after dipping to $902.40, the lowest since July 14. Palladium was up 0.8 percent at $916.60 per ounce, after hitting a two-week low at $904.00. It earlier slipped below platinum after reaching price parity for the first time in 16 years last week.
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