Gold prices tick up as U.S. dollar inches lower

(Reuters) - Gold prices reversed course to edge up on Monday as the dollar pared gains, while investors looked ahead to more U.S. economic data amid expectations of a slower pace of interest rate hikes.

FILE PHOTO: Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk

Spot gold fell 0.2% to $1,922.45 per ounce by 12:02 p.m. ET (1702 GMT). It climbed to its highest since April 2022 on Friday.

U.S. gold futures settled little changed at $1,928.6.

“Bond yields ticked up slightly and the dollar has been going up here this morning - that’s just putting some pressure here on gold,” said Bob Haberkorn, senior market strategist at RJO Futures.

“A lot of people will start hopping in when we see some support around $1,950 to see the inevitable move towards $2,000.”

The dollar index was steady at 102.05, while gains in bullion were limited by benchmark yields being near session-highs. [USD/][US/]

Investors will be scanning the U.S. fourth-quarter GDP report on Thursday before the Federal Reserve policy meeting on Jan. 31-Feb. 1.

Traders are pricing in a 98% chance that the central bank will raise rates by 25 basis points (bps) next month, after slowing its pace to 50 bps last month, following four straight 75-bp hikes.

Zero-yield bullion tends to do well in a lower interest rate environment.

Meanwhile, India is expected to slash the import duty on gold, which could lift retail sales by making the metal cheaper ahead of peak demand season. [GOL/AS]

Elsewhere, spot silver fell 2.1% to $23.45, platinum gained 0.4% to $1,047.42, while palladium was down 0.8% to $1,713.25.

Analysts at Goldman Sachs said in a note that supply disruptions have partially reversed for both palladium and platinum, leading to a small surplus, but that surplus could “easily disappear if the expected recovery in South African mine production fails to materialise”.

Reporting by Seher Dareen in Bengaluru; Editing by Jane Merriman and Devika Syamnath