Gold holds its ground as all eyes turn to US data

Bengaluru — Gold prices steadied on Wednesday, as lower US treasury yields partially offset a firmer dollar, while traders awaited key inflation data and remarks from Federal Reserve officials this week to gauge when the central bank is likely to cut rates.

Spot gold held its ground at $2,030.57/oz at 3.55am GMT. US gold futures fell 0.2% to $2,039.70/oz.

Benchmark 10-year US treasury yields slipped to 4.2914% from 4.3150% on Tuesday, while the dollar index rose 0.1%.

“The anticipation is that the PCE [personal consumption expenditures] report, along with the upcoming GDP data (due at 1.30pm GMT), might act as catalysts for gold to break out of its current trading range within the $2,020-$2,050 area,” said Luca Santos, an analyst at ACY Securities.

Data on Tuesday showed US durable goods orders posted the largest drop in nearly four years in January. US consumer confidence also slid in February.

Markets now await the US Federal Reserve’s preferred gauge of inflation — the core PCE price index — on Thursday.

Fed governor Michelle Bowman on Tuesday reinforced the US central bank’s patient stance on easing, given upside risks to inflation.

At least nine more Fed officials are due to speak this week.

Traders are betting on about 79 basis points (bps) of rate cuts for 2024, with a 63% chance of the first quarter-point (25bps) cut coming in June, according to LSEG’s interest rate probability app.

Lower interest rates boost the appeal of holding non-yielding bullion.

On the technical front, spot gold may retest support at $2,025/oz, a break below could be followed by a drop to $2,015/oz, according to Reuters market analyst Wang Tao.

Spot platinum fell 0.1% to $887.20/oz, while palladium dropped 0.5% to $931.57/oz, while silver rose 0.1% to $22.45/oz.

Reuters