NEW YORK (CNBC) - Gold prices edged lower on Wednesday due to a slight uptick in the dollar, although hopes that the U.S. Federal Reserve would likely cut interest rates by the first half of next year kept bullion near a seven-month peak.
Spot gold fell 0.04% to $2,040.06 per ounce, after hitting its highest since May 5. U.S. gold futures for December delivery fell 0.05% at $2,039.00 per ounce.
“A weaker U.S. dollar and lower interest rates following slightly more dovish comments from Fed officials has lifted gold prices over the last 24 hours. The next resistance will likely be the record high of 2020,” said UBS analyst Giovanni Staunovo.
The dollar index (.DXY) edged 0.1% higher against its rivals. However, the U.S. dollar was poised to mark its worst monthly performance in a year, increasing appeal among other currency holders.
Yields on 10-year Treasury notes fell to an over two-month low.
Traders are now pricing in a more than 70% chance of rates easing in May after Fed Governor Christopher Waller flagged a possible rate cut in the months ahead, up from 50% on Tuesday, according to the CME’s FedWatch Tool.