By Noel John and Pablo Sinha
(Reuters) -Gold edged down on Tuesday as traders booked profits after prices hit a near three-week high earlier in the session, while hopes that resumption of U.S. economic data could prompt a Federal Reserve rate cut next month limited losses.
Spot gold was down 0.1% at $4,110.42 per ounce at 11:28 a.m. ET (1628 GMT), having earlier hit its highest since October 23.
U.S. gold futures for December delivery fell 0.1% to $4,116.30 per ounce.
“We just got into good resistance around the halfway back point and that probably prompted some profit taking on the longs after yesterday’s strong gains and perhaps a little bit of speculative selling up there as well,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
The U.S. Senate on Monday approved a compromise that would end the longest government shutdown on record. The shutdown has triggered a data blackout, leaving policymakers and markets without key indicators on jobs and inflation.
The central bank trimmed rates at its latest meeting, but Chair Jerome Powell stressed that another cut this year is far from certain. Markets see a 64% chance of a rate cut in December, CME’s FedWatch Tool showed. [FEDWATCH]
Gold, traditionally considered a safe haven, also tends to benefit in low-interest rate environments as it is a non-yielding asset.
“Traders believe (data) will show some weakening economic numbers and that would prompt the Fed to cut interest rates in December,” said Jim Wyckoff, senior analyst at Kitco Metals.
Data last week showed the U.S. economy shed jobs in October, while consumer sentiment slumped to its lowest level in three and a half years in early November.
Meanwhile, Fed Governor Stephen Miran on Monday suggested that a 50 basis-point cut might be appropriate for December, given softening labor market and falling inflation.
Elsewhere, spot silver gained 0.2% to $50.68 per ounce, its highest level since October 21. Platinum rose 0.6% to $1,586.60 and palladium climbed 2.5% to $1,450.75.
(Reporting by Noel John, Pablo Sinha and Kavya Balaraman in Bengaluru; Editing by Leroy Leo)
