Gold prices weakened slightly on Thursday (November 27th), after hitting a nearly two-week high in the previous session, as investors weighed the possibility of a US interest rate cut in December.

Spot gold fell 0.2% to $4,157.29 per ounce, as of 16:01 GMT. US gold futures for December delivery fell 0.2% to $4,154.30 per ounce.

"We still expect the consolidation that began with the price decline in October to continue as the impact of that price decline has not yet fully subsided," said Julius Baer analyst Carsten Menke.

Bullion prices have fallen 5% since hitting a record high of $4,381.21 on October 20th, but have generally traded above the key $4,000 per ounce level. "The factors we see supporting the gold market remain largely unchanged, including slowing US growth leading to lower interest rates and a weaker US dollar, continued safe-haven demand, and continued robust central bank buying," Menke added.

Conflicting signals from the Federal Reserve regarding the timing and magnitude of US interest rate cuts have accelerated hedging flows into swaptions and derivatives tied to overnight interest rates.

Kevin Hassett, who has emerged as the front-runner to replace Jerome Powell as Fed Chair, has aligned with President Donald Trump in advocating for rate cuts.

Comments this week from San Francisco Federal Reserve Bank President Mary Daly and Fed Governor Christopher Waller have also strengthened expectations of a rate cut.

Traders are now pricing in an 85% chance of a rate cut next month, compared with just 30% a week earlier, according to CME FedWatch.

Non-yielding gold tends to perform well in low interest rate environments.

US markets are closed on Thursday for the Thanksgiving holiday and will operate on a shortened schedule on Friday.

Spot silver fell 0.3% to $53.17 an ounce, platinum rose 1% to $1,604.72, and palladium rose 0.5% to $1,430.40.(alg)

Source: Reuters.com