Gold prices rose on Tuesday, supported by the prospect of interest rate cuts in 2024 from the Federal Reserve, while investors look forward to a slew of economic data this week for more clarity on the US rate outlook.
Spot gold was up 0.3% at $2,069.19 per ounce, as of 0350 GMT. US gold futures also gained 0.3% to $2,078.10 per ounce.
“The short-term bullish trend in gold still remains intact above key support level of $2,017 per ounce,” said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.
Bullion prices gained 13% in 2023 to post their first annual gain since 2020 as hopes the US central bank could cut interest rates as early as March lifted demand for the safe-haven asset.
Investors’ focus now shifts to the minutes from the last Fed meeting due on Thursday for more cues on rate cuts this year.
“There was a change of tone in December FOMC meeting, so traders will be scrutinizing for much more clarity on this dovish tilt, especially on what the Fed officials are looking out for,” OANDA’s Wong said.
Markets are now pricing in an 86% chance of rate cuts from the Fed in March, according to CME FedWatch tool.
Lower interest rates decrease the opportunity cost of holding non-yielding gold.
Gold prices fall, silver’s unchanged
Also on the radar, data on US job openings and December non-farm payrolls will also been keenly watched for more clarity on Fed rate path.
On the technical front, spot gold may retest support of $2,062 per ounce, a break below could open the way towards $2,053, according to Reuters technical analyst Wang Tao.
Elsewhere, spot silver rose 0.8% to $23.94 per ounce. Platinum fell 0.1% to $986.29 and palladium lost 0.1% to $1,097.56.
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