Gold marches ahead to the beat of a weaker US dollar

Nov 21 (Reuters) – Gold prices climbed over key $2,000 an ounce ceiling on Tuesday, buoyed by expectations that the Federal Reserve has concluded interest rate hikes, pressuring the dollar, while investors awaited minutes from the U.S. central bank’s latest meeting for further policy cues.

Spot gold gained 1.1% to $1,999.29 per ounce, as of 12:17 p.m. ET (1717 GMT), after earlier hitting $2,007.29, its highest level since Nov. 3. U.S. gold futures gained 1.1% to $2,001.40.

“It looks like it’s short covering because of the weaker U.S. dollar and also the fact that it doesn’t look like there’s going to be any more rate interest rate hikes here coming up on the horizon, so that’s bullish for gold,” said Bob Haberkorn, senior market strategist at RJO Futures.

The dollar fell to more than a 2-1/2-month low, making gold less expensive for other currency holders.

Meanwhile, the benchmark U.S. 10-year Treasury yields hovered near two-month lows touched last week.

The minutes from the Fed’s latest meeting are due at 1900 GMT, which could give further clarity on the central bank’s interest rate path.

“After the minutes come out this afternoon, if there’s anything about a pause on rate hikes, you could see (gold) steadily above $2,000,” Haberkorn added.

Signs of slowing inflation in the U.S. have boosted expectations that the Fed has curbed rate hikes. Lower interest rates decrease the opportunity cost of holding gold.

“Now that concerns about the conflict in the Middle East have abated noticeably, the U.S. interest rate outlook has regained the upper hand for gold,” Commerzbank said in a note.

Spot silver rose 1.9% to $23.8 per ounce, platinum gained 2.1% to $937.82, and palladium was up 0.4% to $1,081.82.

The global silver market faces a third consecutive year of supply deficit in 2023, the Silver Institute said last week.

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