PRECIOUS-Gold firms as dollar softens, but rate-hike fears limit gains

Oct 3 (Reuters) – Gold prices edged higher on Monday on a softer dollar, although central banks worldwide retained their aggressive monetary policies to tackle soaring inflation, limiting gains for safe-haven bullion.

FUNDAMENTALS

* Spot gold XAU= was up 0.3% at $1,665.29 per ounce, as of 0115 GMT.

* U.S. gold futures GCv1 ticked 0.1% higher to $1,673.30.

* The dollar index =USD was down 0.2%, making greenback-denominated gold less expensive for overseas buyers. USD/

* Fed policymakers have been resolute in raising interest rates despite a turmoil in global financial markets.

* Fed Vice Chair Lael Brainard on Friday added her full endorsement of the U.S. central bank’s higher-for-longer game plan for interest rates to curb inflation.

* Rising interest rates dim bullion’s appeal as they increase the opportunity cost of holding the non-yielding asset.

* Euro zone inflation zoomed past forecasts to hit 10% in September, a new record high that will reinforce expectations for another jumbo interest rate hike next month from the European Central Bank.

* The physicalgold marketin India flipped to a premium last week as demand improved ahead of festivities, while Chinese premiums stayed elevated.

* India, the world’s second-biggest consumer of gold, slashed the base import prices of the metal on Friday.

* Holdings of SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, fell 0.15% to 939.70 tonnes on Friday.

* COMEX gold speculators increased net short position by 8,333 contracts to 41,300 in week ended Sept. 27, the U.S. Commodity Futures Trading Commission said on Friday.

* Spot silver XAG= rose 0.7% to $19.12 per ounce, platinum XPT= was 0.3% higher at $861.50 and palladium XPD= was up 0.5% at $2,167.75.

DATA/EVENTS (GMT)

0750 France S&P Global Mfg PMI

0755 Germany S&P Global/BME Mfg PMI

0800 EU S&P Global Mfg Final PMI

0830 UK S&P GLBL/CIPS Mfg PMI FNL

1345 US S&P Global Mfg PMI Final

1400 US ISM Manufacturing PMI

British finance minister, Kwasi Kwarteng, speaks at the

annual Conservative party conference in the aftermath of the

pound plummeting following his mini-budget

(Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips)

((eileen.soreng@thomsonreuters.com; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 6131; Reuters Messaging: eileen.soreng.thomsonreuters.com@reuters.net))

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