June 27 (Reuters) –Gold prices held steady on Thursday after falling to a two-week low in the previous session as the dollar and Treasury yields held firm ahead of a key inflation reading due later this week.
FUNDAMENTALS
* Spot gold XAU= was unchanged at $2,298.88 per ounce, as of 0127 GMT. Bullion was at its lowest since June 10 on Wednesday. US gold futures GCcv1 were down 0.2% at $2,309.60.
* The dollar =USD hovered near a roughly two-month high, making gold more expensive for other currency holders, while benchmark 10-year yields US10YT=RR also edged higher. USD/US/
* This week, traders are looking forward to the US first-quarter gross domestic product estimates due on Thursday and the personal consumption expenditures (PCE) price index report on Friday to get more cues on the timing and scale of possible rate cuts this year.
* Sales of new US single-family homes dropped to a six-month low in May as a jump in mortgage rates weighed on demand, offering more evidence that the housing market recovery was faltering.
*US Federal Reserve Governor Michelle Bowman on Wednesday reiterated her baseline view that “inflation will decline further with the policy rate held steady,” and that rate cuts will “eventually” be appropriate if inflation does move sustainably toward 2%.
*Federal Reserve Governor Lisa Cook said on Tuesday the US central bank is on track for a rate cut if the economy’s performance meets its expectations, but she declined to say when the Fed will be able to act.
* Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
*Spot gold XAU= may keep falling into a range of $2,275-$2,286 per ounce, as it is riding on a steady downtrend.
* Elsewhere, the European Central Bank could gradually reduce interest rates if inflation falls as expected, two ECB policymakers said on Wednesday.
*Spot silver XAG= rose 0.1% to $28.78 per ounce, platinum XPT= was up 0.1% to $1,011.65 and palladium XPD= lost 0.6% to $922.94.
DATA/EVENTS (GMT)
0900 EU Consumer Confid. Final June
1230 US Durable Goods May
1230 US GDP Final Q1
1230 US Initial Jobless Clm Weekly
Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Janane Venkatraman
