Gold prices steadied on Thursday after falling to two-week lows in the previous session, as investors awaited U.S. inflation data to determine when the Federal Reserve will cut interest rates.
Spot gold was unchanged at $2,299.55 per ounce around 0255 GMT. On Wednesday, the bullion fell to its lowest level since June 10.
US gold futures fell 0.1% to $2,310.20.
The dollar hovered around eight-week highs, making bullion more expensive for holders of other currencies, while benchmark 10-year yields also held firm.
“The rise in the US dollar accompanied by rising bond yields has left the price of gold swimming against the tide,” said Tim Waterer, chief market analyst at KCM Trade.
Federal Reserve Governor Michelle Bowman on Wednesday reiterated her baseline view that “inflation will continue to decline if the policy rate is maintained,” and that it will “eventually” be appropriate to cut rates if inflation advances significantly. sustained towards 2%.
US first quarter gross domestic product estimates will be released this week at 1230 GMT and personal consumption expenditure (PCE) inflation data will be released on Friday.
“If the core PCE data leaves financial markets pessimistic about when that first Fed rate cut may occur, gold could retreat towards the $2,270 level,” Waterer added.
Although bullion is considered a hedge against inflation, higher rates increase the opportunity cost of holding this non-yielding asset.
“Gold prices remain entangled in a tug-of-war between a less dovish Fed and high levels of geopolitical tension,” BMI analysts noted in a note dated Wednesday. “The main driver of long-term gold price easing will be increased risk sentiment as the global economy recovers in the latter part of the decade.”
Spot silver fell 0.1% to $28.74, platinum fell 0.3% to $1,007.33, while palladium gained 0.2% to $930.39.
