Gold prices move little as pre-inflation jitters, Fed comments weigh
Investing.com-- Gold prices kept to a tight range in Asian trade on Thursday, with traders remaining on the sidelines in anticipation of key U.S. inflation data that is expected to factor into the path of interest rates.
The yellow metal was also pressured by overnight comments from Federal Reserve officials that the bank needed to do more work to bring down inflation. This followed a chorus of officials stating that the Fed was in no hurry to begin cutting interest rates early.
Concerns over higher-for-longer interest rates kept gold trading squarely within a $2,000 to $2,050 an ounce trading range for nearly two months, as traders balked at a potentially higher opportunity cost of investing in the yellow metal.
Spot gold steadied at $2,035.26 an ounce, while gold futures expiring in April were flat at $2,043.45 an ounce by 00:38 ET (05:38 GMT).
Focus was now squarely on PCE price index data- the Fed’s preferred inflation gauge, due later in the day.
The reading is expected to reiterate that U.S. inflation remained sticky in January, especially following a hotter-than-expected consumer inflation reading for the month.
The reading also comes after Fed officials John Williams and Raphael Bostic both said the central bank needed to do more work for inflation to meet the bank’s 2% target.
Their comments, which came after a slew of similar warnings from other officials, cast more doubts over expectations that the Fed will begin trimming rates early in 2024.
While traders are still pricing in a 52.6% chance for a rate cut in June, they have steadily increased bets that the Fed could also hold rates then, according to the CME Fedwatch tool.
Higher-for-longer rates are likely to keep the dollar upbeat, and herald more
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