Wednesday, 27 Nov, 2024

Business

Gold up on weaker dollar as investors wager on Fed rate path

Business Desk | banglanews24.com
Update: 2023-11-23 20:44:07
Gold up on weaker dollar as investors wager on Fed rate path

Gold prices edged up on Thursday as the U.S. dollar ticked lower, but bullion lacked impetus as investors remained on the sidelines in holiday-thinned trading with uncertainty around the Federal Reserve's rate path.

Spot gold was 0.1% higher at $1,991.70 per ounce at 1308 GMT, after hitting a three-week high of $2,007.29 on Tuesday. U.S. gold futures were steady at $1,993.00.

"Absent any fresh influences, I still don’t think that gold has the momentum to maintain prices much above $2,000 for the rest of the year," said StoneX analyst Rhona O'Connell.

"Underlying forces are still supportive for the longer term - geopolitics, especially the Middle East and the probability of further banking stresses in the States and elsewhere - but unless either or both of these escalate, we are likely to see prices drift."

Supporting gold, the dollar (.DXY) eased 0.1% against a basket of other major currencies. Benchmark U.S. 10-year Treasury yields closed at a two-month low on Wednesday.

Lower interest rates decrease the opportunity cost of holding gold.

Trading is expected to be thin with most markets in the U.S. closed for the Thanksgiving holiday.

"Dollar is slightly cooling down after yesterday's (economic) data, but it's very feeble... it's just a normal market movement amidst lower liquidity," said ActivTrades senior analyst Ricardo Evangelista.

Investors dialled back expectations of rate cuts in 2024 after data on Wednesday showed the number of Americans filing new claims for unemployment benefits fell more than expected last week.

"The uncertainty in relation to what the Fed will do next will persist for a bit longer," said Evangelista.

Fed officials agreed at their most recent 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.

Spot silver edged up 0.1% to $23.64 per ounce, platinum fell 0.5% to $917.51 and palladium dropped 0.3% to $1,054.56.

Source Reuters

BDST: 2044 HRS, NOV 23, 2023
MSK

All rights reserved. Sale, redistribution or reproduction of information/photos/illustrations/video/audio contents on this website in any form without prior permission from banglanews24.com are strictly prohibited and liable to legal action.