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Gold is stable but continues to be pressured by expectation of rate hikes

For Arundhati Sarkar

Oct 27 (Reuters) – Gold prices were almost unchanged on Wednesday, although they were pressured by high US bond yields and expectations of tighter monetary policy from the Federal Reserve next year.

* Spot gold was trading at $ 1,793.62 an ounce at 1307 GMT, little changed on the day and after erasing the losses it marked at the start of the session.

* Gold futures in the United States were down 0.4% at $ 1,786.00 an ounce.

* “Markets are embracing a greater likelihood of interest rate hikes by 2022 … (with) some traders betting that the Fed could raise rates twice next year,” said Xiao Fu, head of markets strategy of raw materials from Bank of China International.

* As investors await the European Central Bank (ECB) meeting on Thursday and the Fed’s monetary policy panel decision on November 3, the market remained quiet on Wednesday, he added.

* Meanwhile, 10-year US Treasury yields were trading above 1.6%, increasing the opportunity cost of holding gold as an asset.

* Among other precious metals, spot silver was down 0.9% to $ 23.92 an ounce, while platinum was down 0.56% to $ 1,021.99 an ounce; and palladium fell 1.4% to $ 1,982.98 an ounce.

(Report by Arundhati Sarkar in Bangalore. Edited in Spanish by Marion Giraldo)

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