Gold firms after hopes of a US rate cut in March recede

Gold prices stabilized on Thursday, influenced by the strength of the dollar after the Federal Reserve (the US central bank) resisted the idea of lowering interest rates in March, but the yellow metal maintained its position as investors continued to cling to hopes of lowering interest rates later in the year.

According to Reuters, gold settled in spot transactions at $2,034.50 per ounce by 1046 GMT. While US gold futures fell 0.6% to $2,054.30.

Ole Hansen, head of commodity strategy at Saxo Bank, said: “In general, the gold market is really relying on the continued conviction of lower interest rates and the decline in yields that we have seen since yesterday, and this is happening despite some strength enjoyed by the dollar.”

The Federal Reserve kept interest rates unchanged and ruled out the idea of cutting them in the spring.

According to CME’s Fed Watch tool, traders now expect 92% of interest rates to be cut in May.

The data showed that jobs in the US private sector rose much less than expected in January. Investors are now awaiting the January non-farm payrolls report scheduled for release on Friday.

As for other precious metals, silver fell in spot transactions by 1% to $22.70 per ounce. Platinum fell 1.1% to $908.44, while palladium fell 1.2% to $964.76.