Gold eased below the key $2,000 level on Wednesday, as the dollar stabilized from its recent drop, although expectations that the US Federal Reserve has reached the end of its tightening cycle put a floor under bullion prices.
Spot gold was down 0.1 percent at $1,996.33 per ounce. Bullion scaled a three-week high of $2,007.29 in the previous session.
US gold futures eased 0.2 percent to $1,998.10.
“Softer yields and the dollar have been a clear benefit for gold prices, all thanks to softer US economic data that has brought forward the case for the Fed’s first cut in 2024,” City Index senior analyst Matt Simpson said.
However, “the move lower in the US dollar looks overextended … And with an effective 4-day weekend looming in the US gold currently lacks the legs to commit fully above $2,000.”
The dollar held steady against its rivals after dropping to a more than 2-1/2-month low in the last session, while benchmark US 10-year Treasury yields languished near two-month lows.
A weaker dollar makes gold less expensive for other currency holders.
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. – Reuters
