Gold steady near the $2,000-an-ounce threshold early Wednesday on a weaker dollar and reduction in U.S. bond yields amid renewed hopes that the Federal Reserve will pause its series of interest rate hikes.
Gold comes under pressure when interest rates, the dollar and Treasury yields are strong, and the dollar was trading near two-and-a-half-month lows. But minutes of the last Fed policy meeting Oct. 31 and Nov. 1 came out Tuesday and showed no indication of a possible rate cut, keeping a lid on prices.
February gold futures rose 1.1% Tuesday to settle at $2,021.80 an ounce on Comex, and the front-month contract increased 1.9% in the first two days of the week. Bullion gained 6.9% in October after falling 5.1% in September and dropping 2.2% in August. The metal is up 11% in 2023. The December contract is currently down $0.30 (-0.01%) an ounce to $2001.30 and the DG spot price is $2000.70.
Trading was likely to be light this week going into the U.S. Thanksgiving holiday on Thursday, when Comex trading will be reduced and won’t have a settlement.
Fed officials still worry that inflation could move higher and that they may need to do more to rein it in. So the minutes indicate that policy needs to remain “restrictive.”
The CME FedWatch Tool shows that 99.8% of the investors it tracks are betting that the Fed will keep its federal funds rate unchanged in December, while .2% are expecting a 25 basis point decrease. The Fed has boosted interest rates by 5.25 percentage points since March 2022 to curb inflation to the 2% level. The Fed kept interest rates unchanged at 5.25% to 5.50% earlier this month. The central bank has raised interest rates only once since May.
In other economic news, U.S. weekly initial jobless claims come out Wednesday, early because of the Thanksgiving holiday. Final consumer sentiment data for November are also due out Wednesday. U.S. manufacturing PMI comes out Friday. The U.S. retail holiday sales season, which is often used as an economic indicator, begins at the end of this week with Black Friday.
March silver futures increased 1.1% Tuesday to settle at $24.22 an ounce on Comex. The most-active contract is up less than 0.1% this week. Silver increased 2.2% last month after decreasing 9.5% in September and slipping 0.6% in August. It’s up 0.8% in 2023. The December contract is currently down $0.129 (-0.54%) an ounce to $23.740 and the DG spot price is $23.72.
Spot palladium fell 0.5% Tuesday to $1,097.00 an ounce, though it has advanced 2.4% so far this week. Palladium dropped 10% in October after rising 3% in September and sliding 5.3% in August. Palladium has plummeted 39% so far this year. Currently, the DG spot price is down $39.50 an ounce to $1061.00.
Spot platinum rose 1.9% Tuesday to $947.60 an ounce and has rallied 4.7% so far this week. Platinum gained 3.5% in October after declining 6.6% last month and advancing 1.7% in August. Platinum is down 11% in 2023. The DG spot price is currently down $18.50 an ounce to $928.40.
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