Gold prices stabilized, in early Thursday trading, against the backdrop of statements by Federal Reserve (US Central Bank) officials that reduced market expectations about an imminent cut in interest rates and undermined demand for a safe haven after Israel rejected a proposal from the Palestinian Hamas movement for a ceasefire in Gaza.
Tim Waterer, chief market analyst at KCM Trade, explained that there are sufficient geopolitical concerns to keep the demand for safe haven buying an existing option, which limits the decline in gold prices. On the other hand, the lack of clarity about the possible timing of interest cuts reduces the chances of gold rising soon.
US Central Bank officials want to postpone the interest rate cut until they have greater confidence that inflation is heading towards falling to two percent.
Higher interest rates increase the opportunity cost of holding bullion.
Investors are awaiting the weekly unemployment claims data in the United States, scheduled to be released at 1330 GMT, after the monthly non-farm payrolls report last week came stronger than expected.
Change in prices
Gold settled in spot transactions at $2,033.56 per ounce, by 0427 GMT, while US gold futures contracts fell 0.1 percent to $2,049.00 per ounce.
As for other precious metals, palladium recorded its lowest levels in five years and fell in spot transactions by 0.2 percent to $893.16 per ounce. Silver rose in spot transactions 0.2 percent to $22.24 per ounce, and platinum increased 0.1 percent to $880.05.
