· Gold pared gains on Wednesday as the U.S. dollar came off its lows on strong data from the U.S. service sector index. Having touched its lowest since mid-August on Tuesday, spot gold was up 0.2 percent at $1,274.41 per ounce by 2:25 p.m. EDT (1825 GMT). Earlier on Wednesday, it reached a high of $1,282 per ounce.
· U.S. gold futures for December delivery settled up $2.20, or 0.2 percent, at $1,276.80 per ounce.
· "We had a number of days of decline in a row, and once we had some dollar softness, there was an excuse for gold to rally a little," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.
· The greenback eased against a currency basket after a Politico report said Fed Governor Jerome Powell was favored by U.S. Treasury Secretary Steven Mnuchin as the new Fed chair over former governor Kevin Warsh. Yellen's term expires in February.
Powell is seen as more dovish than Warsh, who has criticized the Fed's bond-buying program in the past. Dollar money market futures were pricing in about a 70 percent chance of a rate hike by December, but a more dovish Fed candidate would likely prompt investors to bet on a slower retreat from the current loose monetary policy.
· "We still feel comfortable with our cautious view on gold as the rebound of the dollar should continue while the slide in (gold) prices increases the risk of further position squaring in the futures market and could trigger selling in the physical market," said Julius Baer in a note.
· Silver dipped 0.04 percent at $16.59 an ounce.
· Platinum rose 0.7 percent at $913.70 an ounce, while palladium climbed 1.1 percent at $925.40 per ounce. The sister metals, widely used as autocatalysts, hit price parity for the first time in 16 years last week.
Reference: Reuters
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