Gold prices struggled for a clear direction on Wednesday, as traders awaited comments from a slew of Federal Reserve officials this week to assess how soon the US central bank may start cutting interest rates.
Gold prices firm on expectations
Fundamentals
Spot gold held its ground at $2,035.12 per ounce, as of 0131 GMT, after rising more than 0.5% in the previous session.
US gold futures were also flat at $2,051.20 per ounce.
Fed officials said on Tuesday that if the US economy performs as expected, it could open the door to rate cuts. But the fight against inflation is “not done yet.”
Fed could take its time before deciding to lower interest rates, something which chair Jerome Powell also remarked on an interview aired on Sunday.
High interest rates increase the opportunity cost of holding bullion, decreasing its appeal among other assets.
Stronger-than-expected jobs and services sector data triggered traders to pare back bets of a May US rate cut. They are now expecting four quarter-point cuts in 2024, according to LSEG’s interest rate probability app IRPR.
Market focus will be on comments from atleast five more Fed officials this week, and later shift to next week’s inflation report due next Tuesday for further clues on Fed policy.
The dollar index and yields on benchmark 10-year Treasury notes edged lower, making non-yielding bullion more appealing for other currency holders.
Spot silver rose 0.1% to $22.41 per ounce, platinum was flat at $903.99, while palladium fell 0.1% to $949.83.