Commodity Market: Gold trades lower amid firmer dollar, but still remains near one-year peak

Spot Gold was a notch weaker on Friday, trading within a narrow range, as the US Dollar bounced off a seven-week trough, while market players mulled US Federal Reserve’s indications of a potential pause in its policy tightening cycle.

The yellow metal, which does not pay any interest, remained at levels not far from recent 1-year peak, after the Fed flagged a possible pause in further rate hikes in the wake of the recent collapse of two US financial institutions.

The US central bank also signaled one more rate increase in 2023.

“However, the Fed also mentioned it would not look to cut interest rates this year,” Brian Lan, managing director at Singapore’s GoldSilver Central, was quoted as saying by Reuters.

Lan cautioned that “gold prices would look to consolidate, unless there’s any big news.”

For the time being, according to Lan, the key focus remains on the US banking crisis, as policy makers are “looking at whether there’s further contagion to that effect.”

US Treasury Secretary Janet Yellen on Thursday looked to reassure investors that bank deposits in the country were secure and pledged there was more firepower to deal with any crisis.

As of 9:42 GMT on Friday Spot Gold was edging down 0.12% to trade at $1,991.07 per troy ounce. Earlier this week, the precious metal went up as high as $2,009.85 per troy ounce, which has been its strongest price level since March 9th 2022 ($2,059.24 per troy ounce).

Gold Futures for delivery in April were inching down 0.05% on the day to trade at $1,994.85 per troy ounce, while Silver Futures for delivery in May were up 0.35% to trade at $23.337 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was gaining 0.64% to 103.248 on Friday. Yesterday the DXY went down as low as 101.915, which has been its weakest level since February 3rd (101.546).