Gold eases in narrow range as traders eye economic data

Bengaluru — Gold prices eased in a tight range on Wednesday as the US dollar firmed, though bullion was not far from a one-week high scaled in the previous session, as traders looked ahead to impending economic data later this week.

Spot gold fell 0.3% to $1,812.42 per ounce by 1115 GMT, after rising more than 1% on Tuesday on the back of a dip in the dollar. US gold futures eased 0.1% to $1,823.20.

“After yesterday's sharp rally, traders are waiting for fresh cues, especially from [Thursday's] GDP data and the performance of US dollar,” said Hareesh V, head of commodity research at Geojit Financial Services.

Reports of a surge in Covid-19 cases in China may be another trend setter for the market, he said, saying prices are most likely to be choppy, possibly between $1,760 and $1,840.

The dollar index was firm on the day after a yen-driven fall in the last session after a Bank of Japan surprise policy tweak.

“The decision was initially interpreted as the first step towards a more hawkish stance from the BOJ, triggering an increase in demand for the yen, generating dollar weakness and benefiting gold... However, today the shock started to wear off... (with) gold giving up some of yesterday's gains,” ActivTrades senior analyst Ricardo Evangelista said.

On the data front, the US GDP (third estimate) due on Thursday and the core personal consumption expenditure (PCE) price index scheduled on Friday are also on the investors' radars.

Gold has risen nearly $200 since falling to a more than two-year low in late September as expectations around slower rate hikes from the Federal Reserve dented dollar's allure.

Rising interest rates increase the opportunity cost of holding gold since the metal does not pay interest.

Spot silver fell 1.4% to $23.84 per ounce, platinum dropped 1.2% to $995.70, while palladium was down 1.8% to $1,701.50.

Reuters