Despite minimal movement on Fed rate cut bets, gold stays constant

27 Dec 2023 , 09:16 AM

In holiday-thinned trading during the final week of the year, gold was unchanged on Wednesday, continuing its ascent for a third session on a weaker dollar and Treasury rates, with speculators anticipating an early start to U.S. rate reduction in 2024.

Spot gold was unchanged at $2,066.86 an ounce. Futures for US gold increased by 0.4% to $2,078.20 an ounce.

The day after Christmas saw little trade because a number of markets were closed for public holidays. The rest of the truncated week was predicted to see little business as well.

Traders were pricing in an 85% chance of a rate drop by the U.S. Federal Reserve in March, according to the CME FedWatch tool.

The dollar index stayed at five-month lows while the benchmark U.S. 10-year bond yield also moved down. 

Lower interest rates make non-yielding bullion more appealing and devalue the US dollar, which increases the allure of dollar-priced gold for foreign exchange holders.

Platinum remained unchanged at $978.56, while spot silver increased 0.2% to $24.25 per ounce. Palladium dropped $1,176.49, or 0.3%.

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