* Gold set to gain 13% to mark best year in three
* Silver eyes small yearly decline, platinum down more than
6%
* Palladium down 38% so far this year – biggest drop since
2008
Dec 29 (Reuters) – Gold prices traded around steady on
Friday as they headed towards the end of their best year since
2020 at levels comfortably above $2,000 an ounce, buoyed by
hopes the U.S. Federal Reserve could cut interest rates as soon
as March.
Spot gold steadied at $2,061.89 per ounce by 10:25
a.m. ET (1525 GMT). U.S. gold futures, however, eased
0.6% to $2,071.10.
Bullion has so far risen 13% in a year that saw prices swing
between lows near $1,800 and a record high of $2,135.40.
“2023 has been a very volatile year for gold, as unexpected
crises (the banking crisis in March, the Hamas attack to Israel
in October) sparked strong price rallies and pushed gold to new
records,” said Intesa Sanpaolo economist Daniela Corsini.
Gold investors anticipate record-high prices next year, when
the fundamentals of a dovish pivot in U.S. interest rates,
continued geopolitical risk, and central bank buying are
expected to support the market.
“To see higher levels, we need to see stronger demand from
investors, such as a pickup in ETF inflows. For that weaker U.S.
economic data and lower inflation is needed, so that the Fed
sounds more dovish,” UBS analyst Giovanni Staunovo said.
Lower interest rates decrease the opportunity cost of
holding non-yielding bullion and weigh on the dollar.
The dollar index was headed for a more than 2%
decline in 2023, while benchmark 10-year Treasury yields
were languishing near their lowest levels since
July.
Spot silver fell 0.4% to $23.83 per ounce, set to log
a 0.5% yearly decline.
“We are positive about industrial demand, in spite of risks
of a slowdown or even a mild recession in the U.S.,” said Philip
Newman, Metals Focus’ Managing Director, seeing the silver
market in a deficit for the foreseeable future.
Platinum fell 0.1% to $1,001.21, while palladium
dropped 2.4% to $1,105.72. Both autocatalytic metals were
on track for a yearly decline, with palladium down around 38% –
its biggest drop since 2008.
(Reporting by Deep Vakil, Hissay Ongmu Bhutia and Swati Verma
in Bengaluru; editing by Barbara Lewis)
