NEW YORK: Gold prices edged lower on Thursday, easing from a near two-week high hit in the previous session, while investors assessed the likelihood of a US interest rate cut in December.
Spot gold was down 0.2 per cent at US$4,157.29 per ounce as of 1601 GMT. US gold futures for December delivery slipped 0.2 per cent to US$4,154.30 per ounce.
“We still expect the consolidation that started with the October setback to continue as the dust of that setback has not fully settled yet,” Julius Baer analyst Carsten Menke said.
Bullion has fallen 5 per cent since hitting a record high of US$4,381.21 on Oct 20, but has broadly traded above the key US$4,000 an ounce level.
“The factors we see in favour of the gold market are largely unchanged, including slowing US growth leading to lower interest rates and a weaker US dollar, sustained safe-haven demand and continued strong central bank buying,” Menke added.
Conflicting signals from the Federal Reserve on the timing and size of US interest rate cuts have accelerated hedging flows into swaptions and derivatives tied to overnight rates.
Kevin Hassett, who has emerged as a frontrunner to replace Jerome Powell as Fed Chair, has aligned with President Donald Trump in advocating a rate cut.
Comments this week from San Francisco Federal Reserve Bank President Mary Daly and Fed Governor Christopher Waller also bolstered expectations of a cut.
Traders are now pricing in an 85 per cent chance of a rate cut next month compared with 30 per cent a week earlier, CME FedWatch showed.
Non-yielding gold tends to perform well in a low-interest-rate environment.
US markets are closed on Thursday for the Thanksgiving holiday and will operate on a shortened schedule on Friday.
Spot silver fell 0.3 per cent to US$53.17 per ounce, platinum gained one per cent to US$1,604.72, and palladium rose 0.5 per cent to US$1,430.40.
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