Gold gains 1% near $2,000 as dollar halts slide

Spot gold was down 0.1 percent at $1,996.79 per ounce, as of 0123 GMT, after hitting a three-week high of $2,007.29 in the previous session. U.S. gold futures were also down 0.1 percent at $1,998.80.

Gold prices on November 22 eased to $2,000 after gaining 1 percent as the dollar stabilised 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.

Silver was up 1.8 percent while platinum rose over 2 percent overnight. The prices were highest since May 2023.

As per Reuters, spot gold was down 0.1 percent at $1,996.79 per ounce, as of 0123 GMT, after hitting a three-week high of $2,007.29 in the previous session. U.S. gold futures were also down 0.1 percent at $1,998.80.

The dollar held steady against its rivals after dropping to a more than 2-1/2-month low in the previous session. 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 October 31-November 1 gathering showed.

Additionally, European Central Bank may start to cut rates in April. Traders now price in over an 80 percent chance of a 25 basis-points (bps) ECB cut by April, which had been fully priced for July last week. They also expect an additional cut next year, now pricing in more than a 50% chance of four, 25 bps cuts by end-2024 that would lower the key deposit rate to 3 percent.

Moreover, earlier this week, China announced that it maintained the Loan Prime Rate (LPR) unchanged across the time curve, as expected. The Chinese central bank left the one-year and five-year LPR steady at 3.45 percent and 4.20 percent, respectively.

Markets are widely expecting the Fed to leave rates unchanged in December and currently pricing in a nearly 60 percent chance of a rate cut of at least 25 basis points by May, according to CME’s FedWatch Tool.

Lower interest rates decrease the opportunity cost of holding gold.

Data on November 21 showed US existing home sales dropped to the lowest level in more than 13 years in October as the highest mortgage rates in two decades and a dearth of houses drove buyers from the market.

Meanwhile, benchmark US 10-year Treasury yields languished near two-month low.

Swiss gold exports in October rose to their highest level since May as deliveries to India surged to meet demand during the country’s festive season, customs data showed on November 21

Spot silver rose 0.3 percent to $23.79 per ounce, while platinum fell 0.3 percent to $931.34. Palladium slipped 0.6 percent to $1,072.35 per ounce.