LONDON – Gold eased into a relatively tight range on Friday pressured by a firmer dollar after a volatile week so far, but the bullion’s longer-term prospects were still bright given bets for a pause in US interest rate hikes.
Spot gold was down 0.4% at $1,985.60 per ounce at 09:00 GMT, but was still locked in a tight $14 range. US gold futures also fell 0.4% to $1,988.20.
Prices gained in the last two sessions after the Federal Reserve raised rates by an expected quarter of a percentage point, but signalled it was on the verge of pausing.
Lower rates burnish appeal for the zero-yield bullion.
While some profit taking and a stronger dollar are pressuring gold, investors are likely to use any dips to add positions, leading prices higher over the next 12 months, said UBS analyst Giovanni Staunovo.
The dollar index rose 0.4%, making bullion costlier for overseas buyers.
On the physical front, data showed Russia’s central bank increased holdings of gold by one million troy ounces since the start of the war in Ukraine.
Gold enables central banks to diversify away from assets like US Treasuries and the dollar, and this buying is seen as one of the factors supporting overall prices.
Silver fell 0.3% to $23.05 per ounce, but was on track for a second straight week of gains.
“We see silver outperforming gold over the next 6-12 months owing to its general leverage to precious metals bull markets, but also its higher exposure to a recovering China, solidly growing India, and its exposure to solar-related consumption growth,” Citi said in a note according to Reuters.
Platinum slipped 0.3% to $981.06, while palladium dropped 1.2% to $1,413.31.
“We favour platinum over palladium, as we expect platinum to benefit from supply disruptions in South Africa and ongoing substitution in autocatalysts, favouring platinum over palladium,” UBS’ Staunovo said.
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