Gold clings to 7-week high as investors gauge Fed trajectory; silver near record peak

GOLD prices held near a seven-week high on Friday, supported by expectations of more interest rate cuts next year after the US Federal Reserve pushed back against hawkish market bets, while silver hovered just below Thursday’s record peak.

Spot gold dipped 0.2 per cent to US$4,275.44 per ounce by 0236 GMT, but was on track for a 1.8 per cent weekly gain after hitting its highest since Oct 21 on Thursday.

US gold futures slipped 0.2 per cent to US$4,306.20.

The dollar was on track for a third straight weekly drop, making bullion cheaper for overseas buyers.

“Gold is looking quite positive and investors are taking cues from the fact that the market is still pricing two rate cuts next year, even though the dot plot suggested just one,” said ANZ analyst Soni Kumari.

The Fed delivered its third 25-basis-point rate cut of the year on Wednesday in a split decision, and investors saw its statement and Chair Jerome Powell’s comments as less hawkish, with officials indicating that any further easing would depend on clearer signs of cooling inflation and a softer labour market.

US jobless claims rose by the most in nearly 4-1/2 years last week, though the jump was not seen as signalling a material softening in labour market conditions.

Non-yielding assets such as gold tend to benefit in low-interest-rate environments, and investors now await next week’s US non-farm payrolls report for further clues on the Fed’s policy path.

Spot silver was up 0.4 per cent at US$63.84 per ounce after hitting a record US$64.31 on Thursday, heading for a 9.2 per cent weekly gain.

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Prices have more than doubled this year, supported by firm industrial demand, shrinking inventories and the white metal’s inclusion on the US critical minerals list.

Exchange-traded fund inflows, physical shortages and the Fed rate-cut outlook are supportive, and technically there is a rounding-bottom breakout pointing to US$75 for silver, said Ajay Kedia, director at Mumbai-based Kedia Commodities.

Elsewhere, platinum was up 0.2 per cent at US$1,698.45, while palladium rose 1.9 per cent to US$1,512.0. Both were headed for a weekly rise. REUTERS