MOSCOW, RUSSIA – JANUARY 31: The process of crafting gold is seen at the Krastsvetmet company, one of the world’s largest producers of precious metals in Moscow, Russia on January 31, 2023. The company produces precious metals in ingots, granules, powders in the form of chemical compounds. Precious metal bars of Krastsvetmet are included in the lists of Good Delivery (high quality of delivery) on international platforms. In 2021, the company produced 203 tons of gold, 484 tons of silver and 102 tons of platinum group metals, which is 59%, 51% and 88% of the total production in Russia, respectively. Jewelry production of Krastsvetmet is a complete technological cycle from the manufacture of alloys to diamond cutting and finishing of products. (Photo by Alexander Manzyuk/Anadolu Agency via Getty Images)
Gold rose as the dollar eased on Thursday, with investors awaiting Federal Reserve Chair Jerome Powell’s speech for clarity on interest rates, while auto-catalyst palladium fell below the $1,000 an ounce level for the first time since 2018.
Spot gold was up 0.5% at $1,959.82 per ounce after hitting its lowest since Oct. 18 earlier in the session. U.S. gold futures rose 0.4% to $1,965.10.
“Today’s gold move is just a dollar story and there is also a technical rebound as we sold-off quite aggressively,” said Bart Melek, head of commodity strategies at TD Securities.
The dollar index fell 0.1%.
“Gold could move above $2,100 in the second quarter of 2024 and the catalyst will be the Fed needing to start cutting rates,” Melek said.
Silver was up 1.7% at $22.90.
Gold has fallen nearly $40 after hitting $2,000 last week when escalating tensions in the Middle East boosted safe-haven inflows.
A slew of Fed officials this week maintained a balanced tone on rate decision, but noted that they would focus on economic data and the impact of higher long-term bond yields.
Powell is scheduled to speak at a conference at 02:00 p.m. ET (1900 GMT).
Investors see a 91% chance of the Fed leaving rates unchanged in December and a 42% chance of introducing a cut as early as June next year, according to the CME FedWatch tool.
Lower interest rates boost zero-yield bullion’s appeal.
Palladium slipped 4.3% to $1,004.84, after falling to its lowest level since 2018 at $991.53.
“Large short positions have exacerbated the downside risk for palladium,” said Standard Chartered analyst Suki Cooper.
“In the near term, supply curtailments have not materialised and demand has been weaker than expected following the UAW strike action.”
Platinum rose 0.2% to $868.00.
