Gold prices held steady overnight, holding close to a two-week high, as the US dollar eased on rising expectations of an interest rate cut by the US Federal Reserve.
Spot gold was up 0.2 per cent at $US1,430.01 an ounce after touching its highest since July 3 at $US1,432.20.
US gold futures settled up 0.3 per cent at $US1,432.90 an ounce.
Prices had jumped about 1.5 per cent in the previous session as the US dollar fell after weaker-than-expected U.S. housing data.
The US currency was last down about 0.1 per cent against key rivals.
“The (US) dollar has resumed lower, and this has allowed gold to find renewed buying interest following Wednesday’s rally,” said Fawad Razaqzada, market analyst with Forex.com.
Gold prices fell to a low of $US1,414.36 earlier in the session but recovered after the US dollar eased.
“Gold’s longer-term trend is in the bullish direction so traders are happy to keep fading the dips in what is a supportive fundamental backdrop with (US) dollar and stocks struggling,” Razaqzada said.
Increased bets on a Fed rate cut have kept gold well supported above $US1,400 and overall momentum is positive, analysts said.
Interest rate futures traders are pricing in a 65 per cent chance of a 25-basis-point cut this month and a 35 per cent likelihood of a 50-basis-point cut, according to the CME Group’s FedWatch tool.
“The anticipation of a rate cut has really driven a lot of the momentum we’ve seen lately. If we don’t get the rate cut, gold is going to head back into $US1,300,” said Jeffrey Sica, founder, president and chief investment officer of SICA Wealth Management LLC.
Silver rose 1.4 per cent to $US16.19 per ounce, extending gains for a fifth straight session.
It touched its highest since February 20 at $US16.21 earlier and posted its biggest one-day percentage gain in more than five months on Wednesday.
“There was a huge relativity gap (when gold rose to a multi-year high in June) so, I think there is some of that rotation. People are getting out of gold or paring length in gold and adding to length in silver,” INTL FCStone analyst Edward Meir said.
“The (gold silver) ratio traders have been saying silver is cheap, so there is some ratio trading going on as well and silver charts looks very strong once we broke out that resistance at $15.50, that brought lots of fund buying.”
Spot platinum was up 0.4 per cent at $US846.17 after touching a two-month peak of $US852.32.
Palladium fell 1.5 per cent to $US1,514.59 per ounce after slipping to its lowest level in more than three weeks at $US1,506.50.