BENGALURU: Gold holds steady as markets count on Fed rate cuts Gold prices steadied above the key $2,000 level on Wednesday, buoyed by expectations of the Federal Reserve’s interest rate cuts next year, while investors awaited US inflation numbers due later in the week.

Spot gold was little changed at $2,033.89 per ounce, as of 1215 GMT. US gold futures fell 0.2% to $2,047.00.

“After the big move, the market is a bit in a wait-and-see mode. It may also be related to lower activity as we approach the holiday period,” UBS analyst Giovanni Staunovo said.

“Market participants will, therefore, watch data which influences the monetary policy of the Fed, like inflation and job data.”

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

Last week, the Fed indicated its tightening phase was concluding and signalled that rate cuts may materialize in 2024.

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.

Some Fed officials have pushed back against surging market expectations of rate cuts. “Comments from Fed officials indicating that the market expectations on Fed cuts are a bit aggressive, have also been a factor limiting the price uptick,” Staunovo added.

Lower US interest rates boost the appeal of gold. Markets are pricing in an about 75% chance of a rate cut in March, according to the CME FedWatch tool.

“We forecast the firm tone to prevail in the near term but think a serious challenge to the upside will have to wait until early 2024,” independent analyst Ross Norman said. In other metals, spot silver lost 0.2% to $23.99 per ounce, while platinum was down by 0.5% to $949.63. Palladium fell 2.1% to $1,198.29.