PRECIOUS-Gold heads for weekly gain as Fed strikes dovish stance
Shafaq News/ Gold prices held steady on Friday but were on track for a weekly rise as the Federal Reserve shifted to a dovish stance and projected lower interest rates next year.
"Thegold marketwill continue to mirror what the expectations from the Fed are, and if the Fed continues to be dovish, then that's going to be good," said Everett Millman, chief market analyst at Gainesville Coins.
"If the U.S. economy, in particular, does not improve early in 2024 then that's a very strong sign that gold will continue to push near all-time high."
Earlier in the week, Fed Chair Jerome Powell said the prolonged tightening of monetary policy is likely over as inflation falls quicker than predicted and a discussion of lower borrowing costs comes "into view", an outlook affirmed by 17 of 19 policymakers.
Markets are pricing in a near 74% chance of a rate cut in March, CME FedWatch tool showed.
Lower interest rates increase the appeal of non-yielding bullion.
But, New York Fed President John Williams pushed back on surging market expectations of interest rate cuts.
The dollar =USD was headed for a weekly drop, making gold cheaper for overseas buyers, while the benchmark 10-year bond yield US10YT=RR hovered near its lowest level since July. US/USD/
Silver XAG= fell 0.7% to $23.97 per ounce, and platinum XPT= fell 1.7% to $941.52. Both metals were also poised for weekly gains.
Palladium XPD= rose 4.1% to $1,147.38 and was headed for its best week since March 2022. Prices had touched a five-year low earlier this month.
"The bounce (in palladium) is being accelerated by short covering from funds who have played palladium with a short bias all year," said Ole Hansen, Saxo Bank's head of commodity strategy.
(REUTERS)
