Gold rises as rate hike expectations played down

On Wednesday, gold rose for a second day following comments by Federal Reserve Bank official that played down the possibility of imminent rate hikes.

Gold gained positive traction for the second successive day and shot to fresh weekly tops, closer to the $1,790 level during the early North American session, meanwhile the US dollar struggled to capitalize on the previous day’s bounce from three week lows.

Fed’s Christopher Waller said that the Reserve Bank should begin tapering bond-buying program next month, though interest rate increases are probably “still some time off”.

Upcoming speeches by Fed officials will include Randal Quarles, Mary Daly and Chair Jerome Powell and will also be of high interest on the part of investors and traders ahead of Fed’s meeting in November.

Gold has fluctuated recently as traders attempt to weigh the pace at which pandemic stimulus will be withdrawn by central banks.

Ongoing inflation, driven by high energy prices and snarled supply chains sparked fresh concerns rate hikes could come sooner than expected, a painful prospect for gold.

Recent mixed economic data from the U.S. has raised doubts among investors about an early hike, which weakens the dollar and raises commodity prices. The cautious market sentiment further extends some support to the safe haven precious metal.