· 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 0.6 per cent at $US1,286.74 an ounce in afternoon trade, after dipping to $US1,281.31, while US gold futures for December delivery settled down $US16.80, or 1.3 per cent at $US1,286.20 per ounce, hitting a one-week low of $US1,283.20.
· "Uncertainty about the next Fed chair being interpreted as being more hawkish encouraged more selling," said Ryan McKay, commodity strategist at TD Securities in Toronto.
· 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
· Meanwhile, the US Labor Department said on Tuesday import prices jumped 0.7 per cent last month, the biggest gain since June 2016, pushing inflation expectations higher and increasing the likelihood of monetary policy tightening.
· Palladium , used mainly in auto catalytic converters, rose 0.9 per cent at $US981.25 per 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.
Reference: Reuters
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