Gold prices rose on Thursday, helped by a softer U.S. dollar and the Middle East conflict lifting safe-haven appeal, while investors await further comments from a Federal Reserve official to gauge the central bank‘s interest rate trajectory.
Spot gold rose 0.5% to $2,015.79 per ounce by 1255 GMT, but was lingering near its five-week low hit in the previous session.
U.S. gold futures gained 0.6% to $2,017.90.
The dollar withdrew after hitting a five-week peak in the previous session as U.S. retail sales increased more than expected in December. [USD/]
“The dollar index had a reasonable pullback, so we are seeing some consolidation (in gold prices),” said Navneet Damani, senior VP of commodity research at Motilal Oswal Financial Services.
Gold is holding above the $2,000 level due to continued central bank buying and rising geopolitical stress, Damani added.
The United States on Wednesday put the Yemen-based Houthi rebels back on its list of terrorist groups, as the militants attacked the second U.S.-operated vessel in the Red Sea region this week. Investors will also parse comments by Atlanta Fed President Raphael Bostic for clues on the timing of interest rate cuts.
Bostic said on Sunday inflation could “see-saw” if policymakers cut rates too soon, echoing Fed Governor Christopher Waller’s remark this week that the U.S. central bank should not rush to lower interest rates until lower inflation can clearly be sustained.
Traders are pricing in a 63% chance of a March rate cut, CME’s Fed Watch tool showed.
A stronger dollar makes gold more expensive for buyers in other currencies, while high interest rates are also bearish for non-yielding bullion.
Spot silver rose 0.4% to $22.60 per ounce.
In 2024, “silver may struggle more than gold given the current weak outlook for China and the global economy,” said Ole Hansen, Saxo Bank’s head of commodity strategy.
Platinum climbed 1.4% to $895.40, while palladium gained 2% to $934.15.