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Gold advances on dollar dip with Jackson Hole meet on radar

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Gold prices gained for a third straight

session on Thursday, helped by a softer dollar, as investors

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looked ahead to the Jackson Hole economic symposium for cues on

inflation and the U.S. Federal Reserve’s rate path.

Spot gold advanced 0.7% to $1,762.59 per ounce by

1103 GMT, its highest since Aug. 18. U.S. gold futures

rose 0.8% to $1,775.80.

The economic symposium starts on Thursday and of particular

interest is Fed Chair Jerome Powell’s speech on Friday.

Investors are interested to know whether Powell would send a

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clear message that could act as a fresh catalyst for bullion.

A slight softening of the U.S. dollar and peaking of U.S.

real yields seem to be the driving factors of gold’s tentative

rebound which is however not backed by safe-haven buying, said

Carsten Menke, analyst at Julius Baer.

The dollar index dropped 0.3%, making gold less

expensive for overseas buyers.

“Central bankers will outline their approaches of how to

deal with high inflation and a cyclically cooling economy via

frontloading of rate hikes,” Menke said, adding, this is what

the market already expects from the symposium at the moment, and

any major reaction of gold prices is rather unlikely.

Rate hikes increase the opportunity cost of holding bullion,

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which pays no interest.

Rhona O’Connell, analyst at StoneX, attributed the gains in

bullion to China’s plan to take more steps to support the

economy, including increasing funding support for infrastructure


The whole commodities sector has benefited from the news,

O’Connell said, adding gold is now moving back into neutral

territory after being oversold.

China’s net gold imports via Hong Kong rose by about 20.2%

in July.

Among other precious metals, spot silver gained 0.7%

to $19.29 per ounce, platinum rose 0.3% to $878.91, and

palladium jumped 1.2% to $2,058.33.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Krishna

Chandra Eluri and Shailesh Kuber)



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