Gold steady as dollar weakens

Spot gold was up 0.1% at $3,739.22 per ounce, while U.S. gold futures for December delivery were unchanged at $3,769.60

Gold prices were little changed on Thursday with a slightly weaker dollar lending some support.

Spot gold was up 0.1% at $3,739.22 per ounce, as of 0557 GMT. U.S. gold futures for December delivery were unchanged at $3,769.60.

Safe-haven bullion, which tends to thrive in a low-interest-rate environment, had hit a record high of $3,790.82 on Tuesday.

The U.S. dollar index dropped 0.1%, making dollar-priced bullion less expensive for overseas buyers.

The move (gold’s rise) may reflect expectations that the Fed intends to run the U.S. economy hot as it rebalances its focus to the labour market, said Ilya Spivak, head of global macro at Tastylive.

Initial support levels line up around $3,700 and $3,600. Breaking resistance at the latest high near $3,790 might expose $3,870-$3,875, followed by $4,000, Spivak added.

On Wednesday, San Francisco Federal Reserve Bank President Mary Daly said she “fully supported” the Fed’s decision to cut its policy rate last week and expects further reductions ahead.

Investors are awaiting the personal consumption expenditures (PCE) price index report, the Fed’s preferred inflation measure, on Friday.

The report is expected to show a month-on-month rise of 0.3% for August and 2.7% year-on-year increase, according to a Reuters poll.

I don’t think the inflation data will significantly impact (gold) unless it’s exceptionally high, GoldSilver Central MD Brian Lan said.

He added: In our quantitative view of the market, the longer term is still very much bullish.

Weekly U.S. jobless claims data, due later on Thursday, may provide insights into labour market conditions.

Markets broadly expect two more 25-basis-point Fed rate cuts this year, in October and December.