Gold climbs higher on dollar dip, Fed pause bets

Nov 27 – Gold hit a six-month high on Monday as a softer dollar and expectations of a pause in the Federal Reserve’s monetary tightening helped bullion consolidate above the key USD 2,000 an ounce level.

Spot gold was up 0.5% at USD 2,012.34 per ounce by 3:01 p.m. ET (2001 GMT), after reaching its highest since May 16. U.S. gold futures GCcv1 settled 0.5% higher at USD 2012.4.

The dollar hovered near a three-month low, making greenback-priced gold less expensive for holders of other currencies.

Gold is likely to trade around USD 2,000 for a little bit until we get some more information from the Fed on its plan on interest rates, said Bob Haberkorn, senior market strategist at RJO Futures.

“Gold will trade higher if they are done with rate hikes for the time being.”

Traders widely expect the U.S. central bank to hold rates in December, while pricing in about a 50-50 chance of easing in May next year, CME’s FedWatch Tool shows.

Lower interest rates reduce the opportunity cost of holding non-interest-bearing assets, often boosting gold prices.

Investors’ attention will be on the U.S. third-quarter GDP figures on Wednesday and the personal consumption expenditures (PCE) price index due on Thursday, the Fed’s preferred inflation gauge.

“Economic figures coming out of the U.S. this week, both on the growth and inflation front, will make or break a case for whether gold remains above USD 2,000,” said Kyle Rodda, a financial market analyst at Capital.com.

On the physical front, data showed that top consumer China’s net gold imports via Hong Kong fell for a second consecutive month in October as a patchy economic recovery weighed on demand in the key bullion market.

Silver jumped 1.3% to a nearly three-month high at USD 24.62 per ounce. Platinum fell 1.3% to USD 918.51 and palladium was down 0.2% at USD 1,071.32.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; Additional Reporting by Daksh Grover; Editing by David Evans and Shailesh Kuber)