LONDON: Gold prices fell to a one-week low on Tuesday on speculation that the eventual successor to US Federal Reserve Chair Janet Yellen will favour higher interest rates.

Spot gold was down 0.7 per cent at $1,285.40 an ounce as of 1417 GMT, while US gold futures for December delivery slipped 1.2pc to $1,286.80 per ounce. “It’s partly (the possibility of a hawkish Fed chair) and that the Fed is going to and needs to hike rates this year that is contributing to a bullish dollar environment,” Martin Arnold, commodities analyst at ETF Securities, said.

US President Donald Trump was favouring policy hawk John Taylor as the next head of the Fed, Bloomberg reported, pushing the dollar higher and lifting US Treasury yields. Taylor, a Stanford economist, is seen as more likely to raise rates than Yellen, which would boost the dollar and dent gold and US Treasuries.

Palladium, used mainly in auto catalytic converters, rose 1.8pc to $990 an ounce, after hitting its highest since February 2001 in the previous session. Analysts are wary about the price of palladium overheating in response to higher demand in the world’s biggest auto market, China, and an expected supply deficit this year.

Silver fell 0.5pc to $17.10 an ounce while platinum was 0.6pc lower at $923, having touched a one-week low.

Published in Dawn, October 18th, 2017