Gold dips from 6-month high as market seeks fresh drivers

Gold dips from 6-month high as market seeks fresh drivers

28 Dec    Finance News, PMN Business, REU

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Gold prices on Wednesday edged lower from last session’s six-month peak on short-term profit taking as the market sought fresh drivers, and a drop in Treasury yields and the dollar capped losses.

Spot gold fell 0.7% to $1,801.75 per ounce by 10:27 a.m. ET (1527 GMT), having hit its highest since the end of June on Tuesday. U.S. gold futures were down to $1,812.00.

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“You’re seeing a corrective pullback, some profit taking from the shorter-term futures traders. It’s mostly technical-trading with the lack of fresh fundamental news in this holiday week,” Jim Wyckoff, senior analyst at Kitco Metals, said.

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The dollar index hovered near its lows for the session, while benchmark 10-year yields edged lower from their highest levels in more than a month, capping bullion’s losses.

Gold has risen around $200 from a more than two-year low, hit in September, on expectations that the U.S. central bank would slow its pace of interest rate hikes, increasing the appeal of the non-yielding asset.

“I see aggressive hawkish monetary policy of the Federal Reserve being mostly factored into prices. You’re starting to see inflation back down a little,” Wyckoff added, highlighting that China opening up further in 2023 could also help demand.

China on Monday scrapped its COVID-19 quarantine rule for inbound travelers even as hospitals and funeral homes were under intense pressure from surging COVID-19 cases. Its civil aviation authority said it would restore pre-pandemic flight procedures by the summer-autumn of 2023.

Contracts to buy U.S. previously-owned homes fell far more than expected in November, largely due to the Fed’s interest rate hikes to curb inflation.

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Traders await Thursday’s initial jobless claims.

In other precious metals, spot silver dropped 1.5% to $23.68 while platinum was down 0.7% to $1,013.00.

Palladium slipped 1.9% to $1,794.75, dropping to $1,774 earlier in the session. (Reporting by Seher Dareen in Bengaluru; editing by Barbara Lewis)

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