Gold prices edged higher on Thursday, supported by a weaker U.S. dollar and increased safe-haven demand amid the Middle East conflict. Spot gold saw a 0.3% rise to $2,011.29 per ounce, while U.S. gold futures also gained 0.3% to $2,013.40.
The U.S. recently designated Yemen-based Houthi rebels as a terrorist group, following attacks on U.S.-operated vessels in the Red Sea region. Gold benefits from a "small geopolitical risk premium and a slight dollar reversal," noted Ole Hansen, Saxo Bank's head of commodity strategy.
The dollar retreated after reaching a five-week peak, influenced by better-than-expected U.S. retail sales in December. Investors are awaiting comments from Atlanta Fed President Raphael Bostic, who is set to speak at two events. Bostic suggested on Sunday that premature rate cuts could lead to fluctuating inflation. Traders are currently estimating a 63% likelihood of a March rate cut, according to CME's Fed Watch tool. A robust dollar increases gold costs for non-U.S. buyers, and higher interest rates typically weigh on non-yielding gold.
Spot silver experienced a 0.3% rise to $22.61 per ounce. Looking ahead, Saxo Bank's Hansen expressed concerns about silver struggling more than gold in 2024 due to the weak outlook for China and the global economy. Platinum climbed 0.9% to $891.32, while palladium gained 1.4% to $928.25.
