PRECIOUS-Gold gains on softer dollar as Fed signals slowdown in rate hikes

Reuters

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      Dollar broadly lower after Fed minutes
    

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      Rising rates until early 2023 still a challenge for gold-
ANZ
    

  
 (Updates prices)
    By Kavya Guduru
       Nov 24 (Reuters) - Gold prices rose to a near one-week
high on Thursday on a weaker dollar, after minutes from the U.S.
Federal Reserve's November meeting signalled it may soon slow
the pace of interest rate hikes. 
    Spot gold  XAU=  was up 0.4% to $1,756.08 per ounce at 1422
GMT. U.S. gold futures  GCv1  advanced 0.6% to $1,756.50.
    The minutes of the Fed's Nov. 1-2 policy meeting showed a
"substantial majority" of Fed policymakers agreed it would
"likely soon be appropriate" to slow the pace of interest rate
hikes.
    The dollar index  .DXY  held onto losses after sliding 1%
overnight, making bullion less expensive for overseas buyers.
 USD/ 
    "Investor expectations are moving on a dovish path for the
Federal Reserve," Carlo Alberto De Casa, external analyst for
Kinesis Money said, adding a weaker U.S. dollar was also a
positive catalyst for bullion. 
    High interest rates have kept a leash on gold's traditional
status as a hedge against inflation and other uncertainties this
year, as they translate into a higher opportunity cost to hold
the non-yielding asset.
    The U.S. central bank delivered a fourth consecutive 75
basis-point (bps) rate hike earlier this month, and market
participants now widely expect a 50 bps rate increase at the
December meeting.  FEDWATCH 
    Rising real rates until early 2023 remained a challenging
backdrop for non-yielding gold, ANZ analysts said in a note.
    But intensifying recessionary and geopolitical risks into
2023, robust emerging markets' physical demand and record high
purchases by central banks suggest gold can still outperform
against real rates, ANZ added.
    Spot silver  XAG=  was little changed at $21.51 per ounce,
platinum  XPT=  shed 1% to $986.42, while palladium  XPD= 
gained 0.7% to $1,893.87.
    Market activity was likely to be muted by the U.S.
Thanksgiving holiday.
 (Reporting by Kavya Guduru in Bengaluru; Editing by Maju Samuel
and Mark Potter)
 ((Kavya.Guduru@thomsonreuters.com;))

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