Gold Futures Pare Gains, Settle Modestly Lower

Gold prices pared early gains and settled lower on Wednesday despite a somewhat weak dollar.

The dollar stayed weak till well past noon with traders weighing the likely path the Federal Reserve would take with regard to rate hikes.

After languishing in the red till a little before noon, the dollar moved above the flat line, but retreated after Fed Chair Jerome Powell confirmed that the central bank will slow the pace of its rate hikes.

“The time for moderating the pace of rate increases may come as soon as the December meeting,” Powell said in the text of his speech at the Brookings Institution event this afternoon.

“Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level,” he said.

The dollar index, which climbed to 107.20 after having dropped to 106.29 earlier, has eased to 106.56, down nearly 0.25% from the previous close.

Gold futures for February, which climbed to $1,779.00 earlier in the session, settled at $1,759.90 an ounce, down $3.80 or about 0.2%.

Silver futures for March ended up $0.345 at $21.781 an ounce, while Copper futures for March settled at $3.7380 per pound, up $0.0.985 from the previous close.

In economic releases, payroll processor ADP released a report showing private sector job growth in the U.S. fell well short of economist estimates in the month of November.

ADP said private sector employment increased by 127,000 jobs in November after surging by an unrevised 239,000 jobs in October. Economists had expected employment to jump by another 200,000 jobs.

“Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains,” said ADP chief economist Nela Richardson.

A separate report from the National Association of Realtors showed a continued decrease in pending home sales in the month of October.

Meanwhile, revised data released by the Commerce Department showed the U.S. economy grew by more than previously estimated in the third quarter.

The report said real gross domestic product spiked by 2.9% in the third quarter compared to the previously reported 2.6% surge. Economists had expected the pace of GDP growth to be unrevised.

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