Gold prices steady amid softer dollar

BENGALURU: Gold prices held steady early on Tuesday as the dollar was pressured by weak U.S. economic data and cautious comments about the global economy from Federal Reserve officials.

FUNDAMENTALS
Spot gold inched 0.1 per cent lower to $1,222.71 per ounce at 0117 GMT.

U.S. gold futures were down 0.2 per cent at $1,223.5 per ounce.

Asian stock markets slipped on Tuesday, extending sharp overnight losses on Wall Street as technology firms bore the brunt of worries about slackening demand, while the dollar sagged after weak U.S. data further sapped confidence in the currency.

The dollar index, which measures the greenback against a basket of six major currencies, fell to its lowest level since Nov. 8 in the previous session.

U.S. home builder sentiment recorded its steepest one-month drop in over 4-1/2 years in November.

The Federal Reserve is pushing ahead with gradual rate-hike plans next month as it marches toward a more normal policy stance that would keep the economy expanding, one of its most influential members said on Monday in the face of growing doubts in financial markets.

The Fed is still expected to raise interest rates again next month and three times next year, but a strong majority of economists polled by Reuters over the past week say the risk is it will slow that pace down.

British Prime Minister Theresa May vowed on Monday to stick to her draft European Union divorce deal as dissenting lawmakers in her own party tried to trigger a leadership challenge.

Italy will stick with its 2019 budget plan despite criticism from the European Commission but talks are continuing, Economy Minister Giovanni Tria said on Monday after attending a meeting of euro zone finance ministers.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.16 per cent to 760.86 tonnes on Monday.

Russia produced 194.23 tonnes of gold in the first eight months of 2018, up from 193.58 tonnes in the same period last year, the finance ministry said on Monday.

Sibanye-Stillwater said on Monday that the Association of Mineworkers and Construction Union (AMCU) planned to strike on Wednesday at its South African gold operations after wage agreement talks broke down.