GOLD prices climbed to a two-week high in early Asian trade on Thursday (Dec 1), after US Federal Reserve chair Jerome Powell’s speech reinforced expectations of smaller interest rate hikes ahead.

Spot gold was up 0.4 per cent to US$1,775.77 per ounce, as of 0039 GMT, having hit its highest level since Nov 16.

US gold futures rose 1.7 per cent to US$1,788.90.

Powell said on Wednesday it was time to slow the pace of coming interest rate hikes while also signalling a protracted economic adjustment to a world where borrowing costs will remain high, inflation comes down slowly, and the US remains chronically short of workers.

Market participants now expect a 91 per cent chance of a 50 basis points rate hike in the US central bank’s upcoming December meeting.

Lower interest rates tend to boost bullion’s appeal as it reduces the opportunity cost of holding the non-yielding asset, which ended November more than 8 per cent higher — its biggest monthly gain since July 2020.

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Meanwhile, US private payrolls increased far less than expected in November, suggesting demand for labour was cooling amid high interest rates, a survey showed on Wednesday.

Investors’ attention now turns to the US Labor Department’s non-farm payrolls data on Friday, which could influence Fed’s policy decisions.

Spot silver gained 0.3 per cent to US$22.26, platinum rose 0.6 per cent to US$1,038.46 and palladium rose 0.6 per cent to US$1,892.35. REUTERS