Gold steadies on Fed pause hopes, dollar rise limit gains – 2023-11-15

* U.S. retails sales fell for the first time in seven months

Nov 16 (Reuters) – Gold prices inched higher on
Thursday, buoyed by expectations that the Federal Reserve has
come to the end of its tightening cycle, although a rebound in
the US dollar kept gains in check.

Spot gold gained 0.1% to $1,961.81 per ounce, as of
0315 GMT. U.S. gold futures were flat at $1,964.60.

“Gold’s volatility has receded following the excitement
after the U.S. inflation report, and it looks quite comfortable
around $1,960 despite the U.S. dollar’s attempt to recoup some
of its losses,” City Index senior analyst Matt Simpson said.

“So without any fresh catalyst, (gold) seems to lack any
major driver for a move today,” Simpson added.

The dollar extended gains against its rivals after robust
U.S. economic data, making gold more expensive for overseas
buyers.

U.S. producer prices fell by the most in three-and-a-half
years in October amid a sharp drop in the cost of gasoline, the
latest indication of subsiding inflation pressures, while retail
sales fell for the first time in seven months.

On Tuesday, data showed U.S. headline consumer prices were
flat in October, against expectations for a 0.1% rise. Core CPI,
at 0.2%, also came in below a forecast of 0.3%.

Signs of slowing inflation boosted bets among investors that
the U.S. central bank is done with its rate-hike campaign.

Traders widely expect the Fed to leave rates unchanged in
December and bet it will start cutting rates by May, according
to the CME FedWatch tool.

Lowering interest rates boosts gold’s appeal, a non-yielding
bullion used as a hedge against inflation.

“Increasing conviction around the narrative of
“higher-for-longer” rates is tarnishing the investment appeal of
gold in the near term,” ANZ analysts said in a note.

“Nevertheless, we see strategic buying emerging after the
recent price correction as long-term drivers remain in place.”

Elsewhere, spot silver fell 0.4% to $23.36 per ounce,
while platinum dipped 0.6% to $890.95. Palladium
lost 0.8% to $1,022.93 per ounce.
(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu and Janane Venkatraman)