Gold holds gains as UK policy changes bolster investor sentiment Gold holds gains as UK policy changes bolster investor sentiment
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Gold holds gains as UK policy changes bolster investor sentiment

Gold holds gains as UK policy changes bolster investor sentiment

Bullion is still trading near its lowest level in the month

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Gold was little changed in Asia after the UK government reversed almost all of Prime Minister Liz Truss’s growth plan that included tax cuts, improving investor sentiment.

Bullion has had a wild ride this year, tumbling about 20 per cent since March as the Federal Reserve has aggressively tightened its monetary policy, prompting investors to seek shelter in the US dollar. The non-yielding metal, which typically has a negative correlation with the dollar and rates, has been pressured by the stronger greenback.

Chancellor of the Exchequer Jeremy Hunt’s move to rip up what was left of the prime minister’s controversial economic programme to restore order to the UK public finances boosted the pound and the nation’s bonds on Monday, causing the US dollar and Treasury yields to slip. That helped gold, which gained as much as 1.5 per cent in the session.

Bullion is still trading near its lowest level in the month, with concerns of a hawkish Fed policy to quash hot inflation weighing on the metal. In China, President Xi Jinping provided few signs of a letup in the nation’s Covid Zero strategy and further support for the ailing property sector.

Spot gold was little changed at $1,650.29 an ounce as of 8.09am in Singapore, after finishing up 0.3 per cent on Monday. The Bloomberg Dollar Spot Index was steady. Silver and platinum were flat, while palladium gained.

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