Gold Edges Higher as Traders Ease Rate-Hike Bets on Warsh Speech

(Bloomberg) -- Gold opened the week higher as traders pared bets on the Federal Reserve raising interest rates this month after remarks by Chair Kevin Warsh.

Bullion was trading around $4,180 an ounce, after falling 0.7% the week before. Traders unwound bets on the probability of a quarter-point hike to less than one-in-five after comments by the Fed chair were interpreted as supporting the case to keep rates on hold when it meets next week. Higher borrowing costs are a headwind for gold, which doesn't pay interest.

A hot US inflation print last week had spurred expectations for US hikes, boosting the dollar, but Warsh's comments halted its gains.

Gold has held above the key $4,000-an-ounce support threshold since August, with its status as a safe haven asset providing a floor since a war-driven slump pushed it into bear territory earlier this year. It is still down around a fifth since the US-Iran conflict erupted in late February.

Spot gold rose 0.4% to $4,180.97 an ounce at 7:35 a.m. in Singapore, while silver gained 0.6% to $57.33. Platinum and palladium advanced. The Bloomberg Dollar Spot Index, a gauge of the US currency, was little changed after falling 0.3% last week.