Gold eased on Wednesday, pressured by an uptick in the US dollar, but prices moved in a tight range in subdued trading due to the lack of any fresh triggers.
Spot gold was down 0.2% at $1,811.20 per ounce as of 0248 GMT.
US gold futures fell 0.2% to $1,818.90. Gold is seeing limited price action as trading activity is light ahead of the New Year holiday and there is no major economic data scheduled this week, said Hareesh V., head of commodity research at Geojit Financial Services.
The dollar index edged up 0.1%, making greenback-priced gold more expensive for overseas buyers, while benchmark 10-year yields slipped from the over one-month highs hit in the previous session.
Gold has risen nearly $200 from a more-than-two-year low in late September as the dollar’s appeal was dented by expectations that the US Federal Reserve would slow its pace of interest rate hikes.
The Fed slowed its pace of rate hikes to 50 basis points (bps) in December after four consecutive increases of 75 bps each.
However, Fed Chair Jerome Powell has warned that the Fed will lift rates further next year.
Higher rates tend to increase the opportunity cost of holding bullion, which pays no interest.
The dollar’s performance, inflation data, Fed’s rate hike path, developments in China and geo-political tension will be major factors influencing gold prices in 2023, Hareesh added.
“Easing curbs in China would be positive for industrial metals on expectations of an increase in demand.”
On Monday, top gold consumer China scraped its COVID-19 quarantine rule for inbound travellers, a major step towards easing curbs on its borders, which have been largely shut since 2020.
In other precious metals, spot silver lost 0.3% to $23.98 and platinum slipped 0.4% to $1,015.67. Palladium fell 0.4% to $1,821.38.
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