Gold hits one-week high on softer dollar; markets await Fed cues
Market sees 58.8% chance of 25 bps US rate cut in December
Silver at one-week peak
Palladium rose over 5% on Monday
Updates prices and adds graphics
By Daksh Grover
Nov 19 (Reuters) -Gold prices climbed to a one-week high on Tuesday, buoyed by a softer U.S. dollar, while the market awaited comments from Federal Reserve officials for cues on the U.S. interest rate outlook.
Spot gold XAU= rose 0.4% to $2,621.95 per ounce by 0514 GMT, the highest since Nov. 12. Prices were up 2% on Monday.
U.S. gold futures GCv1 gained 0.5% to $2,626.30.
The U.S. dollar pulled back as profit-booking kicked in after last week's stellar rally. A weaker dollar makes bullion less expensive for buyers holding other currencies. USD/
"Recent market movements are largely technical, influenced by an overbought U.S. dollar," said Kyle Rodda, financial market analyst at Capital.com.
The recent strong economic data has raised concerns on whether the Fed will continue to cut rates after 75-basis-points of reductions since September. FEDWATCH
Several Fed officials are scheduled to speak this week, potentially offering insights into the rate cut trajectory.
Gold price move will be a reflection of any change in expectations about the December meeting, Rodda said, adding that any data or comments from officials pertaining to it will be relevant.
Traders currently see a 58.9% chance of a 25-basis-points cut in December versus 41.1% odds of holding the rates steady. FEDWATCH
On the geopolitical front, Russia unleashed its largest air strike on Ukraine in almost three months on Sunday, severely damaging the country's power system.
Non-yielding assets like bullion thrive in lower interest rates environment and amid geopolitical uncertainties.
A tight U.S. labour market is still adding to inflationary pressures, although less than it did in 2022 and 2023, according to San Francisco Fed economists.
Among other metals, spot silver XAG= added 0.3% to $31.26, hitting one-week high earlier in the session. Platinum XPT= ticked 0.2% higher to $969.70.
Palladium XPD= was steady at $1,005.75 after rising more than 5% on Monday.
Spot gold price in USD per oz https://reut.rs/3ZeqZfW
Reporting by Ashitha Shivaprasad and Daksh Grover in Bengaluru; Editing by Subhranshu Sahu and Sumana Nandy
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