IGI Logo

Gold held below the key $2,000 level on Wednesday, as the dollar stabilised from its recent drop, although expectations that the U.S. Federal Reserve has reached the end of its tightening cycle put a floor under bullion prices.

FUNDAMENTALS

* Spot gold was down 0.1% at $1,996.79 per ounce, as of 0123 GMT, after hitting a three-week high of $2,007.29 in the previous session. U.S. gold futures were also down 0.1% at $1,998.80.

* The dollar held steady against its rivals after dropping to a more than 2-1/2-month low in the previous session. A weaker dollar makes gold less expensive for other currency holders. [USD/]

* Fed officials agreed at their last policy meeting that they would proceed "carefully" and only raise interest rates if progress in controlling inflation faltered, the minutes of the Oct. 31-Nov. 1 gathering showed.

* Markets are widely expecting the Fed to leave rates unchanged in December and currently pricing in a nearly 60% chance of a rate cut of at least 25 basis points by May, according to CME's FedWatch Tool.

* Lower interest rates decrease the opportunity cost of holding gold.

* Data on Tuesday showed U.S. existing home sales dropped to the lowest level in more than 13 years in October as the highest mortgage rates in two decades and a dearth of houses drove buyers from the market.

* Meanwhile, benchmark U.S. 10-year Treasury yields languished near two-month low. [US/]

* Swiss gold exports in October rose to their highest level since May as deliveries to India surged to meet demand during the country's festive season, customs data showed on Tuesday.

* Spot silver rose 0.3% to $23.79 per ounce, while platinum fell 0.3% to $931.34. Palladium slipped 0.6% to $1,072.35 per ounce.

DATA/EVENTS (GMT)0500 Japan Chain Store Sales YY Oct

1330 US Durable Goods Oct

1330 US Initial Jobless Clm Weekly

1500 EU Consumer Confid. Flash Nov

1500 US U Mich Sentiment Final Nov