Gold rises with the dollar’s decline and fears of raising rates reduce gains

Gold prices rose on Tuesday, as a weaker dollar made bullion more attractive to overseas buyers, although risks from an impending Federal Reserve interest rate hike pared gains.

And the gold price in spot transactions rose 0.2 percent to $ 1653.31 an ounce by 0709 GMT.

But US gold futures fell 0.3 percent to $1,658.50.

The dollar index fell to its lowest level in about ten days after the pound sterling jumped after the United Kingdom abandoned the tax cut plan that had rocked global markets.

Gold is down about 10 percent so far this year as a sharp rise in US interest rates has increased the opportunity cost of holding non-yielding assets and soared the dollar and bond yields.

The interest rate is expected to rise for the fourth consecutive time, 75 basis points next month, after data last week showed inflation rose strongly in September.

On the level of other precious metals, the price of silver rose 0.4 percent to $ 18.75 an ounce, platinum 0.4 percent to $ 919.49 and palladium one percent to $ 2020.40.