Gold surges above $1,800 as slower Fed rate hike prospects weigh on dollar

Gold miners are tallying strong gains in Thursday's trading as gold futures pushed past $1,800/oz for the first time since mid-August following milder than expected U.S. inflation data and a weakening dollar on hopes for slower rate hikes from the Federal Reserve.

February Comex gold (XAUUSD:CUR) +3% to $1,813.30/oz, while March silver (XAGUSD:CUR) +4.3% to $22.72/oz.

The VanEck Gold Miners ETF (NYSEARCA:GDX) surged as much as 4% to its highest since June 2022, led by gains from Barrick Gold (GOLD) +5%, Sandstorm Gold (SAND) +4.9% and New Gold (NGD) +4.9%.

Among other major gold miners: Newmont (NEM) +3.4%, Kinross Gold (KGC) +6.9%, Iamgold (IAG) +4.6%, Yamana Gold (AUY) +3.3%, Harmony Gold (HMY) +3%.

ETFs: (NYSEARCA:GLD), (GDX), (GDXJ), (IAU), (NYSEARCA:NUGT), (PHYS), (XME)

Following Wednesday's comments from Fed Chairman Jerome Powell that the central bank may decide to raise interest rates at a slower pace at its next policy meeting, traders believe "an era of aggressive interest rate hikes is over, and only smaller rate hikes will be taking place."

Powell's remarks sent the dollar falling to a near four-month low against rival currencies, making gold less expensive for overseas buyers.

From a technical perspective, gold is trading above its 50-day, 100-day and 200-day moving averages, which is considered a bullish signal by traders.

Traders will now focus on U.S. non-farm payrolls data due out Friday; if the numbers confirm the weakness seen in the latest inflation data, the "gold market would most certainly have the excuse that it has waited to move higher," according to Saxo Bank's Ole Hansen.

Citing a strong dollar, an anticipated reopening in China and metal inventory shortages, Bank of America is long gold in one of its top 10 trades for 2023.