Gold prices tick up as US dollar inches lower

Jan 23 (Reuters) – Gold prices reversed course to edge up on Monday as the dollar pared gains, while investors looked ahead to more US economic data amid expectations of a slower pace of interest rate hikes.

Spot gold fell 0.2% to USD 1,922.45 per ounce by 12:02 p.m. ET (1702 GMT). It climbed to its highest since April 2022 on Friday.

US gold futures settled little changed at USD 1,928.6.

“Bond yields ticked up slightly and the dollar has been going up here this morning – that’s just putting some pressure here on gold,” said Bob Haberkorn, senior market strategist at RJO Futures.

“A lot of people will start hopping in when we see some support around USD 1,950 to see the inevitable move towards USD 2,000.”

The dollar index was steady at 102.05, while gains in bullion were limited by benchmark yields being near session-highs.

Investors will be scanning the US fourth-quarter GDP report on Thursday before the Federal Reserve policy meeting on Jan. 31-Feb. 1.

Traders are pricing in a 98% chance that the central bank will raise rates by 25 basis points (bps) next month, after slowing its pace to 50 bps last month, following four straight 75-bp hikes.

Zero-yield bullion tends to do well in a lower interest rate environment.

Meanwhile, India is expected to slash the import duty on gold, which could lift retail sales by making the metal cheaper ahead of peak demand season.

Elsewhere, spot silver fell 2.1% to USD 23.45, platinum gained 0.4% to USD 1,047.42, while palladium was down 0.8% to USD 1,713.25.

Analysts at Goldman Sachs said in a note that supply disruptions have partially reversed for both palladium and platinum, leading to a small surplus, but that surplus could “easily disappear if the expected recovery in South African mine production fails to materialize”.

(Reporting by Seher Dareen in Bengaluru; Editing by Jane Merriman and Devika Syamnath)