Gold holds steady as Fed rate cut bets offset dollar strength

Kitco Media
By Reuters
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Reuters
Gold holds steady as Fed rate cut bets offset dollar strength teaser image

Nov 24 (Reuters) - Gold prices held steady on Monday, as growing expectations of a Federal Reserve rate cut next month helped offset pressure from a firm U.S. dollar.

Spot gold was up 0.1% at $4,069.10 per ounce, as of 1153 GMT. U.S. gold futures for December delivery fell 0.3% to $4,065.40 per ounce.

The dollar (.DXY), held near the six-month high hit on Friday, making greenback-priced gold more expensive for holders of other currencies.

"Gold steadied as investors evaluated the prospect of another Fed rate cut after New York Fed President John Williams signalled there may be room to lower borrowing costs amid a softening labour market, even as other officials struck a more cautious tone," said Ole Hansen, head of commodity strategy at Saxo Bank.

Williams had said on Friday U.S. interest rates could fall without putting the Fed's inflation goal at risk, while helping guard against a slide in the job market.

Bets of a rate cut next month had surged to 75% from 40% on Friday, following dovish comments from Williams, the CME FedWatch tool showed. 

FEDWATCH

Gold, a non-yielding asset, tends to do well in low-interest-rate environments.

Meanwhile, investors awaited key economic indicators, including U.S. retail sales, jobless claims and producer price figures due later this week.

On the geopolitical front, the U.S. and Ukraine were set to continue work on Monday on a plan to end the war with Russia after agreeing to modify an earlier proposal that was widely seen as too favourable to Moscow.

"Gold struggles to gain traction on Fed cut likely being pushed, China demand concerns, easing trade risks. On downside support, central banks remain net buyers and concerns persist on Supreme Court decision (on Trump's tariffs)," Standard Chartered said in a note.

Elsewhere, spot silver was up 0.2% at $50.09 per ounce, platinum rose 0.4% to $1,517.43 and palladium gained 0.3% to $1,378.39.

Reporting by Noel John in Bengaluru; Editing by Mrigank Dhaniwala, Saad Sayeed and Krishna Chandra Eluri

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