An employee places bars of 99.99 percent pure gold in a workroom at the Novosibirsk precious metal refining and production plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/File Photo Acquire License Rights
- Gold is up 0.7% so far this week
- Platinum is aiming for its second weekly gain
- The dollar is heading for its second weekly decline
Nov 24 (Reuters) – Gold prices held steady on Friday and are poised for a second straight weekly rise, supported by a weaker U.S. dollar, as markets grew confident that the Federal Reserve is ready to raise interest rates.
Spot gold remained at $1,992.46 an ounce at 02:05 GMT. Gold prices are up 0.7% this week. U.S. gold futures were little changed at $1,993.40.
“The theme in financial markets last week has been falling yields and a falling U.S. dollar, and… (these) are favoring a rise in gold prices,” said Tim Waterer, chief market analyst at KCM Trade.
The dollar index (.DXY) fell 0.2% against its peers and was on track for a second weekly decline, making gold cheaper for other currency holders.
The benchmark 10-year U.S. Treasury yield rose slightly to 4.4568%.
Markets pared expectations for Fed rate cuts in 2024 after data showed the number of Americans filing new claims for jobless benefits fell more than expected last week.
However, stronger-than-expected labor market data has not changed the view that the U.S. labor market is slowing due to higher interest rates.
Earlier this week, Fed minutes showed the central bank would proceed “cautiously” and “all participants deemed it appropriate” to maintain current interest rate setting.
Traders generally expect the Fed to keep rates on hold in December, while pricing in about a 26% chance of a rate cut as early as March, according to CME’s FedWatch tool.
“There is a disconnect between market expectations about interest rates and what the Fed minutes showed, and that is what is causing some dovishness in gold prices,” Waterer said.
Lower interest rates reduce the opportunity cost of holding gold.
Spot silver rose 0.1% to $23.69 an ounce, palladium rose 0.4% to $1,049.55. Platinum was flat at $915.57 but headed for its second weekly advance.
Reporting by Brijesh Patel in Bengaluru; Edited by Sherry Jacob-Phillips and Rashmi Aich
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