Gold prices fall after dollar rebounds

Gold prices retreated in choppy trading on Thursday as a rise in the US dollar offset support for the precious metal from expectations that the Federal Reserve will slow interest rate hikes after next week's policy meeting.

Spot gold fell 0.2% to $1,661.25 an ounce, while US gold futures settled 0.2% lower at $1,665.60. "Gold seems to be focused on the dollar and technicals here with an element of profit taking from yesterday," said Bart Melek, head of commodity markets strategy at TD Securities. The dollar rose 0.6% against rivals after hitting a one-month low in the last session, making bullion less attractive to overseas buyers. Data showed the US economy rebounded more than expected in the third quarter as the trade deficit narrowed, returning to growth after contracting in the first half of the year. But consumer spending was curbed by the Fed's aggressive rate hikes. Markets expect the US central bank to raise its benchmark overnight rate by another 75 basis points at its policy meeting on November 1-2, followed by a smaller hike in December. US rate hikes increase the opportunity cost of holding zero-yielding gold bullion. "It's probably too early to talk about stopping rate hikes... We don't expect a reversal because inflation will remain a problem for most of next year," Melek added. In addition to next week's US monetary policy meeting, investors will focus on US personal income data for September, due on Friday, which will include the latest reading of a measure of inflation closely watched by the Fed. Elsewhere, spot silver fell 0.6% to $19.51 an ounce, while platinum added 1.3% to $963.38 and palladium dropped 1.2% to $1,940.33. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!