Gold Heads for First Weekly Gain in Three on Fed Pause Hopes

FILE PHOTO: Gold bars are pictured at the plant of gold and silver refiner and bar manufacturer Argor-Heraeus in Mendrisio, Switzerland, July 13, 2022. REUTERS/Denis Balibouse//File Photo

Gold prices extended gains on Friday and were set for their first weekly rise in three, as investors stepped up bets that the US Federal Reserve is done raising interest rates, pressuring the dollar and Treasury yields.
Spot gold was up 0.2% at $1,985.29 per ounce, as of 0745 GMT, after hitting its highest since Nov. 6 in the last session. US gold futures were steady at $1,985.29.
The bullion is up 2.5% so far this week.
"There's probably a couple of set of sequences in which we could see gold push sustainably through $2,000, and that's a very rapid deterioration in the data, which suggests again that rate cuts are on the horizon," said Kyle Rodda, a financial market analyst at Capital.com.
"Alternatively, the war is still bubbling, simmering away in the background," Rodda added.
Data this week showed the US consumer price index was unchanged in October and the core rate was up 0.2%, weaker than anticipated. Producer prices fell by the most in three-and-a-half years.
Meanwhile, the number of Americans filing new claims for unemployment benefits increased more than expected, which could also help the Fed's fight against inflation.
Market participants revised their forecasts for future Fed action.
Lower interest rates decrease the opportunity cost of holding gold, a non-yielding asset used as a hedge against inflation.
The dollar was on track for a weekly drop, making gold less expensive for buyers holding other currencies, while the 10-year Treasury yield hovered near two-month lows.
Spot gold may have resumed its uptrend and may break a resistance at $1,989 per ounce and rise into a range of $1,999-$2,003, according to Reuters technical analyst Wang Tao.
Spot silver rose 0.5% to $23.81 per ounce and was up 7.2% for the week so far, while platinum was flat at $23.81, but has gained 6.2% for the week.
Palladium fell 0.2% to $1,035.54 per ounce, but was heading for its best week in a year.