Gold rangebound as Chinese New Year thins trade

Bengaluru — Gold prices steadied in a tight range on Monday in holiday-thinned trading, as investors awaited remarks from a slew of US Federal Reserve officials in a data-packed week.

Spot gold was flat at $2,022.39/oz, oscillating in a $5 range, by 3.40am GMT.

US gold futures were also steady at $2,036.20/oz.

“Gold is remarkably resilient, given we’ve seen almost 60 basis points [bps] of cuts [for 2024] come out of the market since the January high,” said Kyle Rodda, a financial market analyst at Capital.com.

“Positioning is neutral, and if the data deteriorates, softening the dollar and deepening US rate cut bets, then gold will shine again. The big risk this week is consumer price index (CPI) — if that comes in hot, another test of $2,000/oz level could be on the cards”

Trading is expected to be thin during Asian trading hours due to holidays in China, Hong Kong, Japan, South Korea, Singapore, Taiwan, Vietnam and Malaysia.

Comex gold speculators raised their net long position by 10,616 contracts to 82,591 in the week ended February 6, data showed on Friday.

Market participants will focus on US CPI data on Tuesday, retail sales data on Thursday and produce price index (PPI) data on Friday, while also awaiting remarks from Fed officials this week.

Several Fed officials, including chair Jerome Powell, have said last week they want to see more evidence inflation will continue to decline before cutting rates.

Traders have all but ruled out a rate cut at the Fed’s next meeting in March, according to LSEG’s interest rate probability app (IRPR). It shows about a 62% chance of a cut in the May meeting.

Spot platinum fell 0.2% to $870.25/oz, while palladium rose 0.3% to $861.48, while silver was also up 0.3% to $22.66.

Reuters