Gold prices eased on Wednesday as the dollar somewhat stabilized from its drop in the previous session, although bullion held above key $1,700-per-ounce level with investors eyeing more clarity on the U.S. Federal Reserve’s future policy stance.


Spot gold was down 0.2% at $1,722.69 per ounce, as of 0120 GMT, but was not far from $1,729.39, its highest level since Sept. 13 scaled on Tuesday.

U.S. gold futures were flat at $1,731.70.

The dollar index crawled 0.1% higher, after the unit shed 1.3% overnight to its biggest drop since March 2020.

A government survey showed on Tuesday that U.S. job openings fell by the most in nearly 2-1/2 years in August, suggesting that the labor market was starting to cool as the economy grapples with higher interest rates.

San Francisco Federal Reserve Bank President Mary Daly said on Tuesday the U.S. central bank has the tools and the knowledge to bring down high inflation, and will use them, even as it tries to find the “gentlest” way to do so.

Gold is highly sensitive to rising U.S. interest rates, as they increase the opportunity cost of holding the metal and boosts the dollar in which the bullion is priced.

Gold-supplying banks have cut back shipments to India ahead of major festivals in favor of focusing on China, Turkey, and other markets where better premiums are offered, three bank officials and two vault operators told Reuters.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 1.74 tons on Tuesday.

Spot silver dipped 0.8% to $20.95 per ounce, platinum fell 0.2% to $928.12 and palladium slipped 0.6% at $2,301.77.