Gold treads water as investors eye US data and inflation counter
The odds of a Fed rate cut in March have dropped to 49% from about 71% two weeks ago, according to the LSEG interest-rate probability app
22 January 2024 - 07:36
byHarshit Verma
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.
Confiscated gold is displayed during an operation against illegal mining. Picture: UESLEI MARCELINO/REUTERS
Bengaluru — Gold prices were little changed on Monday, as traders cautiously awaited fresh data on the US economy and the Federal Reserve’s preferred inflation gauge due later this week, leading up to the central bank’s interest rate decision next week.
Spot gold edged 0.1% lower to $2,026.39 per ounce by 3.48am GMT (5.48am).
US gold futures fell 0.1% to $2,028.00.
Bullion fell about 1% last week — its biggest weekly decline in six.
Last week, Fed officials said that it needs more inflation data in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter.
The remarks came on the heels of improved US consumer sentiment, solid labour market and retail sales data that indicated the economy remained firm.
The odds of a Fed rate cut in March have dropped to 49% from about 71% two weeks ago, according to LSEG’s interest-rate probability app IRPR.
The US dollar index fell 0.1%, while yields on benchmark US 10-year Treasury notes slipped from a more than a month high to 4.1111%.
Investors will be watching out for a US flash PMI report on Wednesday, fourth-quarter advance GDP estimates due on Thursday and personal consumption expenditures (PCE) data on Friday.
“If PCE inflation treads higher than the headline CPI report, I suspect USD bears will continue to cover, to strengthen the dollar, and cap gold’s upside potential,” said Matt Simpson, a senior analyst at City Index.
“A pick-up in PMI will strengthen the case for fewer Fed cuts and further push back expectations for the first cut.”
Higher interest rates increase the opportunity cost of holding bullion.
Spot silver fell 0.2% to $22.55 per ounce, platinum was steady at $898.95, and palladium fell 0.1% to $945.88.
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 treads water as investors eye US data and inflation counter
The odds of a Fed rate cut in March have dropped to 49% from about 71% two weeks ago, according to the LSEG interest-rate probability app
Bengaluru — Gold prices were little changed on Monday, as traders cautiously awaited fresh data on the US economy and the Federal Reserve’s preferred inflation gauge due later this week, leading up to the central bank’s interest rate decision next week.
Spot gold edged 0.1% lower to $2,026.39 per ounce by 3.48am GMT (5.48am).
US gold futures fell 0.1% to $2,028.00.
Bullion fell about 1% last week — its biggest weekly decline in six.
Last week, Fed officials said that it needs more inflation data in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter.
The remarks came on the heels of improved US consumer sentiment, solid labour market and retail sales data that indicated the economy remained firm.
The odds of a Fed rate cut in March have dropped to 49% from about 71% two weeks ago, according to LSEG’s interest-rate probability app IRPR.
The US dollar index fell 0.1%, while yields on benchmark US 10-year Treasury notes slipped from a more than a month high to 4.1111%.
Investors will be watching out for a US flash PMI report on Wednesday, fourth-quarter advance GDP estimates due on Thursday and personal consumption expenditures (PCE) data on Friday.
“If PCE inflation treads higher than the headline CPI report, I suspect USD bears will continue to cover, to strengthen the dollar, and cap gold’s upside potential,” said Matt Simpson, a senior analyst at City Index.
“A pick-up in PMI will strengthen the case for fewer Fed cuts and further push back expectations for the first cut.”
Higher interest rates increase the opportunity cost of holding bullion.
Spot silver fell 0.2% to $22.55 per ounce, platinum was steady at $898.95, and palladium fell 0.1% to $945.88.
Reuters
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 heads for weekly fall as dollar rises
Mining challenges raise likelihood of mergers and acquisitions
Gold close to five-week low on hawkish Fed comments
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.