Gold prices remained muted on Wednesday ahead of crucial US inflation data due this week that could offer more clarity on the timing of the Federal Reserve’s first interest rate cut this week. anus.
Spot gold was flat at $2,319.95 per ounce around 0337 GMT. US gold futures held at $2,331.30.
The dollar rose 0.1% against its rivals, making gold more expensive for holders of other currencies, while benchmark 10-year yields also rose.
“Rising Treasury yields and a firmer US dollar overnight on the back of hawkish comments from the Federal Reserve have led to some weakness in gold prices this morning as calls for faster monetary policy easing failed to find much validation from policymakers,” said Yeap Jun Rong, market strategist at IG.
US Federal Reserve Governor Michelle Bowman reiterated her view on Tuesday that keeping the policy rate stable “for some time” will probably be enough to control inflation, but she also reiterated her willingness to raise borrowing costs. if necessary. For her part, Fed Governor Lisa Cook stated that “at some point” the time will come to cut interest rates.
Estimates of the first quarter gross domestic product in the United States will be published on Thursday, and on Friday the report on the price index of personal consumption expenditures (PCE).
“Risks come with any upside surprise in inflation, which could trigger greater uncertainty around the Fed’s policies and could see a further reversal in the yellow metal,” IG’s Jun Rong added.
Higher rates increase the opportunity cost of holding non-yielding bullion.
“Declines in the price of gold remain relatively shallow, courtesy of buyers staying on the sidelines on price pullbacks,” Tim Waterer, chief market analyst at KCM Trade, said in a note.
Waterer added that a break above the $2,368 level would be necessary for gold to overcome last week’s highs.
Spot silver rose 0.1% to $28.94, platinum rose 0.8% to $989.70, while palladium lost 0.5% to $943.49.
