One kilo gold bars are pictured at the plant of gold and silver refiner and bar manufacturer Argor-Heraeus in Mendrisio, Switzerland, July 13, 2022. REUTERS/Denis Balibouse/File Photo Acquire Licensing Rights
Nov 23 (Reuters) – Gold prices rose on Thursday, hovering close to a key $2,000 per ounce level as a weaker U.S. dollar and lower Treasury yields buoyed demand for bullion.
Spot gold was up 0.4% at $1,996.84 per ounce, as of 0747 GMT, after hitting a three-week high of $2,007.29 on Tuesday.
U.S. gold futures gained 0.3% to $1,998.20.
“The anticipation of this effective pivot towards interest rate hike cycle peak is translating to ongoing softness in the U.S. dollar and the longer-dated U.S. yield which will support gold prices, at least in the short term,” said Kelvin Wong, senior market analyst for Asia Pacific at OANDA.
The dollar (.DXY) was down 0.2% against its rivals after gains in the previous two sessions, making gold less expensive for other currency holders.
The benchmark U.S. 10-year Treasury yields fell to a two-month low on Wednesday.
The number of Americans filing new claims for unemployment benefits fell more than expected last week, but that likely does not change the view that the labor market is slowing amid higher interest rates.
Traders widely expect the U.S. Federal Reserve to leave rates unchanged in December, but dialled back expectations of rate cuts in 2024 after the jobless claims data, according to CME’s FedWatch Tool.
Lower interest rates decrease the opportunity cost of holding gold.
Fed officials agreed at their last policy meeting that they would proceed “carefully” and only raise interest rates if progress in controlling inflation faltered, the minutes of the Oct. 31-Nov. 1 gathering showed on Tuesday.
Meanwhile, U.S. consumers’ inflation expectations rose for a second straight month in November, a survey released Wednesday showed.
Spot gold may revisit its Nov. 21 high of $2,007.29 per ounce, as it may have completed a correction from this level, according to Reuters technical analyst Wang Tao.
Spot silver rose 0.4% to $23.70 per ounce, platinum climbed 0.4% to $926.11 and palladium was steady at $1,057.96.
Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi Aich, Eileen Soreng, Sherry Jacob-Phillips and Sohini Goswami
Our Standards: The Thomson Reuters Trust Principles.
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2023-11-23 08:17:00