Gold prices under pressure from rate-cut angst before inflation data

investing.com:

Investing.com-- Gold prices moved little in Asian trade on Wednesday, retaining most of their losses from the prior week as investors questioned bets on early interest rate cuts by the Federal Reserve.

Focus was largely on upcoming U.S. consumer price index data, which could indicate U.S. inflation remained sticky in December.

Gold was nursing steep losses over the past week as traders steadily scaled back bets that the Fed could begin trimming interest rates by as soon as March 2024. This notion triggered sharp gains in the dollar, which also weighed on bullion prices.

Still, the yellow metal managed to hold above the coveted $2,000 an ounce level, after handily crossing the level in early-December. Gold prices were also up about 10% for 2023.

Spot gold steadied at $2,029.30 an ounce, while gold futures expiring February steadied at $2,034.65 an ounce by 00:28 ET (05:28 GMT).

CPI data due on Thursday is expected to show inflation grew slightly in December. Sticky inflation, coupled with recent signs of resilience in the labor market, give the Fed more headroom to keep rates higher for longer.

Traders were seen steadily cutting bets that the Fed could begin trimming rates by as soon as March 2024. The CME Fedwatch tool showed bets on a 25 basis point rate cut in March at a 63.6% chance, down from a 69.6% chance seen a week ago.

Fed officials were also seen pushing back against expectations for early rate cuts, with Atlanta Fed President Ralph Bostic stating that he remained biased towards monetary policy remaining tight in the near-term.

While the Fed has signaled it will eventually cut rates in 2024, it has provided scant information on the timing of the cuts. The central bank has so far maintained a largely data-driven