Singapore - HSBC's James Steel says although gold will likely be helped by expected Fed interest rate cut in December, tight or neutral monetary policies by most other countries would offset global inflation, work against gold rally.

"The fact that other central banks, while providing liquidity (to markets), have not followed the Fed in cutting rates this year may limit whatever bullish impact lower US rates may have on gold prices," he says. He adds possible slowing in US, global growth, which are normally supportive to gold prices as monetary policies are eased to spur growth, may not be positive for gold at present. Higher oil prices, food prices denting consumer spending on jewelry, also reducing central bank flexibility to respond to weakening demand, financial turmoil, Steel says.

Spot gold was last bid at USD797.45/oz, up USD2.25 from New York close.

[Source: Dow Jones Newswire]