Gold holds gains on rising expectations of US interest-rate cut

Bullion has risen nearly 60% this year and remains on track for its best annual performance since 1979, despite retreating from a record high late last month

Gold steadied, having gained nearly 1% in the previous session on growing expectations of another interest-rate cut in the US.

Bullion was trading around $4,160 an ounce, supported by a series of comments by Federal Reserve policymakers that point to further monetary easing in the world’s biggest economy. Swap traders see a roughly 80% chance of a quarter-point cut in December, with the latest US jobless claims data seen as unlikely to derail the Fed from a reduction.

Reinforcing prospects for lower rates, a key economic adviser to US President Donald Trump is emerging as the frontrunner to be the next Fed chair. Kevin Hassett is expected to mirror the president’s dovish approach to monetary policy. Gold typically benefits when rates are low, as it doesn’t pay interest.

Bullion has risen nearly 60% this year and remains on track for its best annual performance since 1979, despite retreating from a record high late last month. The metal has been supported by elevated central-bank purchases and inflows to exchange-traded funds, with investors piling into a wider retreat from sovereign bonds and currencies.

Since its pullback, the precious metal has consolidated above the $4,000-an-ounce level with limited momentum in either direction. For the last three weeks, inflows to gold-backed ETFs have been flat, according to Bloomberg calculations.

This slowdown relative to September and October could mean that gold’s “near-term floor has become vulnerable,” analysts from Standard Chartered Plc including Sudakshina Unnikrishnan said in a note. They added that prices have been in a holding pattern and are awaiting the next catalyst.

Gold was little changed at $4,160.06 an ounce as of 9:05 a.m. Singapore time. The Bloomberg Dollar Spot Index was flat after ending the earlier session 0.3% lower. Silver was steady, after rising 3.7% on Wednesday, close to a record high. Palladium gained, while platinum was flat.