Gold marches ahead to the beat of a weaker US dollar

Nov 21 – Gold hurdled over the USD 2,000 mark on Tuesday, buoyed by expectations that the Federal Reserve had reached an interest rate peak after minutes from the US central bank’s latest meeting anchored a cautious approach to more hikes.

Spot gold gained 1.2% to USD 1,999.92 per ounce by 2:30 p.m. ET (1930 GMT), after earlier hitting a three-week peak at USD 2,007.29. US gold futures settled 1.1% higher at USD 2,001.60.

“Bulls are gorging themselves on gold ahead of the Thanksgiving holiday,” said Tai Wong, a New York-based independent metals trader.

Fed officials agreed at their last meeting, its minutes showed, that interest rates would only need to move higher “if” incoming information showed insufficient progress in lowering inflation.

“The minutes suggest that bond and gold bulls shouldn’t overindulge just yet,” Wong added.

The dollar hit more than a 2-1/2-month low, making gold less expensive for other currency holders. The benchmark US 10-year Treasury yields also hovered near two-month lows touched last week.

“It doesn’t look like there’s going to be any more interest rate hikes here coming up on the horizon, so that’s bullish for gold,” said Bob Haberkorn, senior market strategist at RJO Futures.

Signs of slowing inflation in the US have boosted expectations that the Fed has curbed rate hikes. Lower interest rates decrease the opportunity cost of holding gold.

“Now that concerns about the conflict in the Middle East have abated noticeably, the US interest rate outlook has regained the upper hand for gold,” Commerzbank said in a note.

Spot silver rose 1.9% to USD 23.85 per ounce on its best day in a week. Platinum gained 2% to hit a three-week high at USD 936.51 and palladium was up 0.1% at USD 1,078.56.

The global silver market faces a third consecutive year of supply deficit in 2023, the Silver Institute said last week.

(Reporting by Anjana Anil and Deep Vakil in Bengaluru; Editing by Marguerita Choy, Shailesh Kuber, and Shilpi Majumdar)