Gold falls 1% as dollar firms, traders brace for Fed speeches

By Harshit Verma

(Reuters) – Gold fell 1% to a two-week low on Tuesday on a firmer dollar, with traders positioning for interest rate cues from a host of Federal Reserve speakers this week.

Spot gold fell 1% to $1,957.50 per ounce by 1321 GMT, its lowest since Oct. 24. U.S. gold futures dropped 1.2% to $1,964.70.

“Gold prices appear to be heading lower after a failure to push above the $2,000 an ounce key resistance, (that) prompted some profit taking, (and) appears to be being driven by a stronger US dollar which is higher across the board,” said Michael Hewson, chief market analyst at CMC Markets.

The dollar index rose 0.4%, making bullion more expensive for overseas buyers. [USD/]

Gold gained more than 7% in October as the conflict in the Middle East boosted safe-haven demand.

The gold market is waiting for further dovish signals from the U.S. central bank before the rally can continue, said Carlo Alberto De Casa, market analyst at Kinesis Money.

Investors now await a host of speeches from Fed officials this week, with the spotlight on Chair Jerome Powell, who is due to speak on Wednesday and Thursday.

Investors see a 90% chance of the Fed leaving rates unchanged in its December meeting, and a 75% chance of introducing a cut as early as June next year, according to CME FedWatch tool.

However, Fed Bank of Minneapolis President Neel Kashkari said the central bank likely has more work ahead of it to control inflation.

“If we see some sort of tepid demand (in the Treasury auctions this week) … that could put upward pressure on yields again and put some downside pressure on gold,” said Kyle Rodda, financial market analyst at [US/]

Spot silver fell 2.2% to $22.52 per ounce and platinum eased 1.2% to $894.73.

Palladium slipped 1.2% to $1,093.27 and was down 39% for the year so far.

“Substitution from palladium to platinum and more electric vehicles being sold will likely push the metal into a structural surplus next year,” UBS said in a note, adding it sees prices targeting $1,050 per ounce in the second half of 2024.

(Reporting by Harshit Verma, Anushree Mukherjee and Anjana Anil in Bengaluru; Editing by Eileen Soreng and Maju Samuel)