By Anushree Ashish Mukherjee
(Reuters) – Gold prices firmed on Thursday, aided by a retreating dollar and safe-haven demand amid the Middle East conflict, while investors looked out for further clarity on the U.S. Federal Reserve’s future interest rate path.
Spot gold rose 0.4% to $2,012.89 per ounce by 9:56 a.m. ET (1456 GMT) after hitting a five-week low in the previous session.
U.S. gold futures also gained 0.4% to $2,015.50.
The dollar fell after climbing a five-week peak in the previous session. While yields on the benchmark U.S. 10-year Treasury notes also declined.[USD/][US/]
Geopolitical tensions are unintentionally coordinating efforts to keep gold in the $2,000 range as there is so much uncertainty, said Daniel Pavilonis, senior market strategist at RJO Futures.
The U.S. on Wednesday put the Yemen-based Houthi rebels back on its list of terrorist groups, as the militants attacked their second U.S.-operated vessel in the Red Sea region this week.
A weaker dollar makes bullion cheaper for overseas buyers, while high-interest rates dent non-yielding bullion’s appeal.
At least two Fed policymakers – Atlanta Fed President Raphael Bostic and Fed Governor Christopher Waller – have spoken against cutting rates too fast.
Traders are pricing in a 57% chance of a March rate cut, according to CME’s Fed Watch tool.
Gold investors are analysing how much of a negative impact delayed interest rate cuts might have on prices, though a bunch of U.S. data misses could help gold’s cause, said Fawad Razaqzada, market analyst at City Index, in a note.
Data showed jobless claims fell last week to the lowest level since late 2022, suggesting job growth likely remained solid in January.
Spot silver was steady at $22.53 per ounce.
“We forecast a 2024 price of $24.33/oz; ETF (exchange traded funds) demand may recover from liquidation; we anticipate deficits to buoy prices,” HSBC said in its 2024 outlook.
Platinum climbed 1.8% to $898.99, and palladium gained 2.4% to $937.39.
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Tasim Zahid)
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