Spot gold was 0.1% lower to $2,064.79 per ounce not far from a more than two-week high of $2070.39 touched on Friday
Gold prices stabilised on Wednesday as trading was muted in the last week of the year, but bullion was headed for its best year in three on hopes the Fed will cut rates in the first quarter of 2024.
Spot gold was 0.1% lower to $2,064.79 per ounce, as of 0452 GMT, not far from a more than two-week high of $2070.39 touched on Friday. Bullion was on track to mark a more than 10% gain this year — its best since 2020.
U.S. gold futures added 0.3% to $2,076.00 per ounce.
Gold is mainly supported by hopes of interest rate cut in the U.S. next year, according to Jigar Trivedi, a senior analyst at Reliance Securities.
However, trading volumes are very thin and spot gold will remain in a $2050 to $2070 range on Wednesday and Thursday, he said.
Last week’s cooler U.S. inflation data bolstered financial market expectations for an interest rate cut from the Fed next March, with traders now pricing in around an 80% chance, according to the CME FedWatch tool.
The dollar index was holding near a 5-month low, while it eyed its worst yearly performance since 2020.
A weaker dollar makes gold more attractive for holders of other currencies.
Spot silver dropped 0.1% to $24.16 per ounce, and looked set to mark a marginal gain of 1% over the year.
Platinum shed 0.2% to $976.75. Palladium gained 0.3% to $1,177.22. Both autocatalytic metals were on track to log a yearly drop with palladium eyeing a 34% drop — its worst since 2008.
