Gold prices held steady above the key $2,000 level on Wednesday, supported by prospects of interest rate cuts from the Federal Reserve next year, while investors awaited US inflation numbers later this week.

Spot gold was little changed at $2,038.77 per ounce, as of 0251 GMT.

US gold futures were unchanged at $2,052.20.

Last week, the Fed indicated its tightening phase was at an end and signaled that rate cuts are in the cards for 2024.

Atlanta Fed President Raphael Bostic on Tuesday said there is no current “urgency” for the Fed to reduce US interest rates given the strength of the economy.

“The Fed are pushing back on rate cuts, and unless we see a materially weaker PCE inflation report then there could be some room for disappointment from those calling for a March cut, and limit gold’s upside potential,” said Matt Simpson, a senior analyst at City Index.

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Markets are pricing in about a 75% chance of a Fed rate cut in March, according to CME FedWatch tool.

Lower US interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.

“Gold could certainly hit a new high in 2024. But the bigger question is if it can hold on to any such breakout given its inability to hold above $2,075 for any length of time over the years,” Simpson said.

Investors now await the November core personal consumption expenditure (PCE) index report, the Fed’s preferred measure of underlying inflation, due on Friday.

Further progress on beating back inflation will be the decisive factor in any Fed decision next year to reduce interest rates, Chicago Fed Bank President Austan Goolsbee said.

Spot silver rose 0.2% to $24.06 per ounce, while platinum gained 0.2% to $955.98 and palladium climbed 0.5% to $1,229.28.