Dubai gold slips to Dh140 for 22k as dollar firms up

Gold prices edged lower on Wednesday morning.

Gold prices edged lower early Wednesday as equities gained and the dollar firmed amid waning risk-averse sentiment, with the market awaiting minutes from the US Federal Reserve's latest policy meeting for fresh clues on the pace of interest rate hikes.
22k gold can be bought for Dh140 in Dubai and 24k is priced at Dh149.25.
Spot gold was down 0.2 per cent to $1,221.56 per ounce at 0438 GMT, but still near a 2-1/2-month high of $1,233.26 per ounce hit on Monday. 
US gold futures were down 0.5 per cent at $1,225.2 an ounce.
"The newly minted gold bulls are getting nervous as they haven't bought at good levels. They were in pretty much at the top and we see those guys exiting the market," said Stephen Innes, APAC trading head at OANDA in Singapore.
Asian equities rose on Wednesday after upbeat US earnings reports drove a rebound on Wall Street.
The dollar index, which measures the greenback against a basket of six major currencies, was up 0.1 per cent.
The firming in equities and the dollar has led to the market discounting US President Donald Trump's latest criticism of the Fed, which should have otherwise been supportive of gold, a Singapore-based trader said.
Trump heaped more criticism on the Fed, calling it 'my biggest threat' in an interview with Fox Business Network on Tuesday.
Last week, Trump criticized the US central bank twice, saying it was raising interest rates so swiftly that it threatened the country's economic health.
The Fed raised interest rates last month for the third time this year and said it planned four more increases by the end of 2019 and another in 2020.
"The current case of interest rates normalisation is quite cemented and this is taking a little bit of the froth off gold markets," Innes said.
The release of the minutes from the Fed's September policy meeting is due at 1800 GMT, Wednesday.
Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.
Spot gold still targets a range of $1,208-$1,217 per ounce, as it failed to break a strong resistance at $1,235, according to Reuters technical analyst Wang Tao.
 
Gold, usually seen as a safe store of value during political and economic uncertainty, remains more than 10 percent down from its April peak after investors preferred the dollar as the US-China trade war unfolded against a background of higher US interest rates.
 

• Gold and Forex