Gold hovers near 2020 record highs on softer dollar, weak US data

GOLD prices hovered near record highs seen in 2020, trading steady above the key US$2,000 level on Wednesday (Apr 5), as the dollar eased after weak US economic data fanned expectations that the Federal Reserve might loosen its monetary policy trajectory.

Spot gold held its ground at US$2,020.39 per ounce, as of 0123 GMT. US gold futures were steady at US$2,037.20.

The dollar index was down 0.1 per cent, making bullion cheaper for buyers holding other currencies.

Gold prices rallied 2 per cent to hit their highest in more than a year on Tuesday after another round of weaker US economic data indicated a slowing economy and strengthened expectations of a less-aggressive Fed policy.

Data showed US job openings in February dropped to the lowest level in nearly two years, suggesting the labour market was cooling. A separate report showed new orders for US-manufactured goods fell for a second straight month in February.

The Fed is seen done raising interest rates and starting to cut them in the summer.

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Gold prices ease as US dollar regains some ground

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But Federal Reserve Bank of Cleveland president Loretta Mester said while the economy appears on a path towards slowing down, the US central bank likely has more rate hikes ahead of it.

While gold is traditionally considered a hedge against inflation and economic uncertainties, higher interest rates dim the appeal for non-yielding bullion.

Spot silver eased 0.1 per cent to US$24.99 per ounce, while platinum was 0.2 per cent higher at US$1,020.47 and palladium edged up 0.1 per cent to US$1,458.51. REUTERS