September 30 (Reuters) – Gold prices edged up on Thursday but hovered near a seven-week low, limited by a strong dollar and expectations of the US Federal Reserve ending stimulus soon.
* Spot gold was up 0.2% to $ 1,729.83 an ounce at 0054 GMT. Prices fell to their lowest level since August 9 at $ 1,720.49 on Wednesday.
* US gold futures rose 0.4% to $ 1,729.20.
* The dollar index stabilized near the one-year high reached on Wednesday, raising the cost of gold to buyers in other currencies.
* Benchmark 10-year US Treasury yields were slightly lower, reducing the opportunity cost of holding non-interest-bearing bullion. But they remained above 1.5%, a level not seen since the end of June, still posing a challenge for gold.
* San Francisco Federal Reserve Chairman Mary Daly said on Wednesday that the U.S. central bank would be able to start cutting asset purchases by the end of the year, but believed a hike interest rate was still “far away”.
* Philadelphia Fed Bank Chairman Patrick Harker has said it is âsoonâ time to start cutting back on the Fed’s economic stimulus.
* Supply constraints hampering global economic growth could worsen further, keeping inflation high for longer, even if the current price spike is expected to remain temporary, the world’s major central bankers warned on Wednesday.
* Gold has traditionally been viewed as a hedge against inflation, although reduced central bank stimulus measures and interest rate hikes tend to drive up government bond yields, resulting in in turn by a higher opportunity cost for gold which earns no interest.
* Silver rose 0.3% to $ 21.58 an ounce.
* Platinum gained 0.4% to $ 954.08 and palladium rose 0.3% to $ 1,862.23.
DATA / EVENTS (GMT) 0600 UK GDP QQ, YY Q2 0645 France IPC (EU Norm) Prelim YY Sept 0900 EU unemployment rate August 1200 Germany IPC Prelim YY Sept 1230 US GDP Final Q2 1230 US Initial Jobless Claims Weekly ( Report by Nakul Iyer in Bangalore; Editing by Ramakrishnan M.)