Shafaq News/ Gold prices steadied on Wednesday as trading was muted in the last week of the year, but bullion was headed for its best year in three on expectation the Federal Reserve will cut rates in the first quarter of 2024.
Spot gold XAU= was down 0.1% to $2,064.55 per ounce, as of 0611 GMT, not far from an over two-week high of $2070.39 hit on Friday. Bullion was on track to mark an over 10% gain this year - its best since 2020.
U.S. gold futures GCcv1 rose 0.3% to $2,075.80 per ounce.
Gold is mainly supported by expectations of interest rate cut in the U.S. next year, Jigar Trivedi, a senior analyst at Reliance Securities, said.
However, trading volumes are very thin and spot gold will remain in a $2050-$2070 range on Wednesday and Thursday, Trivedi added.
Last week's cooler U.S. inflation data boosted financial market expectations for an interest rate cut from the Fed next March, with traders now pricing in about an 80% chance, according to the CME FedWatch tool.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
The dollar index .DXY was holding near a 5-month low, while it eyed its worst yearly performance since 2020. USD/
A weaker dollar makes gold more attractive for other currency holders.
According to Reuters market analyst Wang Tao, spot gold may break resistance at $2,073 per ounce and rise into the $2,080-$2,091 range. TECH/C
Spot silver XAG= fell 0.3% to $24.12 per ounce, and looked set to mark a marginal gain of about 0.6% over the year.
Platinum XPT= fell 0.2% to $976.69. Palladium XPD= rose 1.1% to $1,187.44. Both autocatalytic metals were on track to log a yearly decline with palladium eyeing a 34% fall - its worst since 2008.
(REUTERS)