Nov 21 (Reuters) – Gold surged above $2,000 on Tuesday, buoyed by expectations that the Federal Reserve has peaked on interest rates after minutes from the U.S. central bank’s latest meeting anchored a cautious approach to further rate hikes.
Spot gold was up 1.2% at $1,999.92 an ounce by 2:30 p.m. ET (1930 GMT), having earlier hit a three-week high of $2,007.29. US gold futures were up 1.1% at $2,001.60.
“Bulls are gorging on gold ahead of the Thanksgiving holiday,” said Tai Wong, a New York-based independent metals trader.”The minutes suggest that bond and gold bulls shouldn’t get too excited just yet,” Wong added.
The dollar hit a more than 2-1/2-month low, making gold cheaper for holders of other currencies. Benchmark 10-year US Treasury yields were also hovering near two-month lows hit last week.”It doesn’t look like there are any more rate hikes on the horizon here, so that’s bullish for gold,” said Bob Haberkorn, senior market strategist at RJO Futures.
Signs of slowing inflation in the US have fueled expectations that the Fed has put the brakes on rate hikes. Lower interest rates reduce the opportunity cost of holding gold.”Now that concerns about the conflict in the Middle East have eased noticeably, the US interest rate outlook has regained the upper hand for gold,” Commerzbank said in a note.
Spot silver rose 1.9% to $23.85 an ounce, its best day in a week. Platinum gained 2% to a three-week high of $936.51 and palladium was up 0.1% at $1,078.56.
The global silver market faces a third consecutive year of supply deficit in 2023, the Silver Institute said last week.
