Gold holds some gains after Fed’s Powell speaks; palladium sinks

Nov 9 – Gold held on to some gains on Thursday after Federal Reserve Chair Jerome Powell reiterated the need for higher interest rates to rein in inflation, while auto-catalyst palladium fell below the USD 1,000 an ounce level for the first time since 2018.

Spot gold was up 0.4% to USD 1,957.62 per ounce by 4:15 p.m. ET (2115 GMT). US gold futures settled up 0.6% at USD 1,969.80.

Prices rose as much as 0.8% earlier in the session, after touching their lowest since Oct. 18.

Powell said Fed officials “are not confident” that interest rates are yet high enough to finish the battle with inflation, sending the US dollar and Treasury yields higher.

“Powell’s comments are less dovish than hoped which has prevented a further advance in gold, though it has broken a three-day losing streak,” said Tai Wong, a New York-based independent metals trader.

“Gold seems likely to stay in a range under USD 2,000 as geopolitics is still exercising an outsized influence.”

Bullion has fallen over USD 40 after hitting USD 2,000 last week when escalating tensions in the Middle East boosted safe-haven inflows.

Silver was up 0.4% to USD 22.6.

“Gold could move above USD 2,100 in the second quarter of 2024 and the catalyst will be the Fed needing to start cutting rates,” said Bart Melek, head of commodity strategies at TD Securities.

Traders pushed out bets on the Fed’s likely first interest-rate cut to June of next year from May earlier.

Lower interest rates boost zero-yield bullion’s appeal.

Palladium slipped 5.5% to USD 992.69, hitting its lowest level since 2018.

“Large short positions have exacerbated the downside risk for palladium,” Standard Chartered analyst Suki Cooper said.

“In the near term, supply curtailments have not materialized and demand has been weaker than expected following the UAW strike action.”

Platinum fell 0.8% to USD 859.49.

(Reporting by Ashitha Shivaprasad, Anushree Mukherjee, and Deep Vakil in Bengaluru; Editing by Shinjini Ganguli, Krishna Chandra Eluri, and Shounak Dasgupta)