Gold holds steady as investors await US inflation data
Prices fell 1% on Thursday after data showed the US economy grew more than expected in the December quarter
27 January 2023 - 07:58
byAshitha Shivaprasad
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Bengaluru — Gold prices were little changed on Friday as traders awaited US inflation data, due later in the day, to gauge the Federal Reserve’s stance on further interest rate hikes.
Spot gold was flat at $1,927.99/oz at 2.34am GMT, while US gold futures were off 0.1% at $1,928.30.
Investors are now awaiting US personal consumption expenditures (PCE) data, the Fed’s preferred inflation measure, at 1.30am GMT for cues on the central bank’s path forward.
Traders are in wait-and-see mode, said IG Market strategist Yeap Jun Rong, adding that a downside surprise in inflation may point towards a less-hawkish Fed, which could drive longer-term upward moves in gold prices.
On Thursday, bullion prices fell 1% after data showed the US economy grew at a faster pace in the December quarter than economists had expected, prompting bets that the Fed will keep interest rates higher for longer.
However, this could have been the last quarter of solid growth before the impact of the Fed’s aggressive tightening spree starts reflecting, with most economists expecting a mild recession by the second half of 2023.
The GDP data points to a resilient US economy but there were some signs of challenges to the economy, which kindled some hopes of a less aggressive Fed, Yeap said.
Investors broadly expect the Fed to scale back rate hikes to 25 basis points at its January 31-February 1 meeting, from 50 bps in December.
Lower interest rates tend to be beneficial for bullion as it lowers the opportunity cost of holding the non-yielding asset.
Spot silver fell 0.2% to $23.86/oz.
Platinum lost 0.4% to $1,013.88, and palladium slipped 0.4% to $1,670.87. Both the metals were headed for a third straight week of declines.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold holds steady as investors await US inflation data
Prices fell 1% on Thursday after data showed the US economy grew more than expected in the December quarter
Bengaluru — Gold prices were little changed on Friday as traders awaited US inflation data, due later in the day, to gauge the Federal Reserve’s stance on further interest rate hikes.
Spot gold was flat at $1,927.99/oz at 2.34am GMT, while US gold futures were off 0.1% at $1,928.30.
Investors are now awaiting US personal consumption expenditures (PCE) data, the Fed’s preferred inflation measure, at 1.30am GMT for cues on the central bank’s path forward.
Traders are in wait-and-see mode, said IG Market strategist Yeap Jun Rong, adding that a downside surprise in inflation may point towards a less-hawkish Fed, which could drive longer-term upward moves in gold prices.
On Thursday, bullion prices fell 1% after data showed the US economy grew at a faster pace in the December quarter than economists had expected, prompting bets that the Fed will keep interest rates higher for longer.
However, this could have been the last quarter of solid growth before the impact of the Fed’s aggressive tightening spree starts reflecting, with most economists expecting a mild recession by the second half of 2023.
The GDP data points to a resilient US economy but there were some signs of challenges to the economy, which kindled some hopes of a less aggressive Fed, Yeap said.
Investors broadly expect the Fed to scale back rate hikes to 25 basis points at its January 31-February 1 meeting, from 50 bps in December.
Lower interest rates tend to be beneficial for bullion as it lowers the opportunity cost of holding the non-yielding asset.
Spot silver fell 0.2% to $23.86/oz.
Platinum lost 0.4% to $1,013.88, and palladium slipped 0.4% to $1,670.87. Both the metals were headed for a third straight week of declines.
Reuters
Gold inches up as dollar softens and amid hopes for Fed slowdown
Gold heads for weekly rise on hopes Fed will curb hikes
Gold inches lower as dollar firms and Fed rate hikes slow
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Gold slightly up as dollar dips
Southern Palladium speeds up licence request for PGM project
Global stocks pause as investors ponder further rate hikes
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.