Gold inches up as dollar tumbles to lowest since Oct

Thursday,   29-Jun-2017   02:25 PM (IST)

Gold edged higher on Thursday as the U.S. dollar weakened against other currencies on bets that central banks in Europe were preparing to scale back monetary stimulus, but the bullion's gains were capped by a surge in equities. The dollar index, which tracks the greenback against a basket of six major rival currencies, fell to its weakest since early October on Thursday at a low of 95.685. A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies and can increase demand. Spot gold rose 0.1 percent to $1,249.79 per ounce at 0740 GMT. U.S. gold futures for August delivery rose 0.1 percent to $1,249.70 per ounce. Hawkish comments from European Central Bank President Mario Draghi, and Bank of England Governor Mark Carney have raised expectations of a tighter monetary policy in Europe. Draghi earlier this week hinted the ECB could trim its stimulus this year, but according to some sources his remarks were intended to signal tolerance for a period of weaker inflation and not imminent policy tightening. Governor Carney said on Wednesday, though, a rise in British interest rates is likely to be needed and the Bank of England will debate when to do so "in the coming months". Comments from two top Bank of Canada policymakers have also increased hopes of an interest rate hike next month.