Colombo (LNW): Gold prices stabilised on Thursday (28), relinquishing earlier gains that marked a more than three-week high.
The rise in U.S. bond yields countered support stemming from expectations of Federal Reserve rate cuts early next year.
At 9:35 a.m. ET (1435 GMT), spot gold edged down 0.2 per cent to $2,072.79 per ounce, following an earlier peak at $2,088.29, the highest since December 4, when gold achieved its all-time peak.
Simultaneously, U.S. gold futures dropped 0.5 per cent to $2,082.60.
Chris Gaffney, President of World Markets at EverBank, said, “There’s not a lot of trading volume right now in any of the markets, so that usually causes smaller moves, especially when we’re approaching a big number like an all-time high.”
While the dollar index lingered near a five-month low, poised for a yearly decline, benchmark 10-year bond yields increased, yet remained close to their lowest levels since July.
The rise in Americans filing initial claims for unemployment benefits indicated a cooling labour market in the fourth quarter.
Investors, anticipating an 87 per cent chance of a Fed rate cut in March according to the CME FedWatch tool, continue to factor in lower interest rates, reducing the opportunity cost of holding non-yielding gold.
UBS analyst Giovanni Staunovo anticipates higher gold prices over the next year, driven by weaker U.S. economic data and lower inflation, prompting the Fed to cut rates.
In physical markets, China’s net gold imports via Hong Kong increased by about 37 per cent in November compared to the previous month.
Spot silver declined 0.6 per cent to $24.094 per ounce but was set to close the year about 1 per cent higher.
Platinum advanced 0.3 per cent to a more than six-month high of $999.33, while palladium retreated 1.2 per cent to $1,139.85. Both autocatalytic metals were on track for yearly declines.
