Gold slips below $2,050 as dollar rebounds amid Fed uncertainty

investing.com:

Investing.com-- Gold prices rose slightly in Asian trade on Thursday, but hovered below key levels as the dollar rebounded on growing doubts over exactly when the Federal Reserve will begin trimming interest rates. 

Anticipation of key nonfarm payrolls data also kept investors largely wary of buying outside the dollar, which presented more headwinds to non-yielding assets such as gold. 

The yellow metal saw a strong run-up in the last few days of 2023, amid growing optimism that the Fed could begin cutting rates by as early as March 2024.

But the metal was hit with some profit-taking at the beginning of the new year, while traders also somewhat trimmed expectations on early rate cuts from the central bank.

Spot gold rose 0.1% to $2,043.68 an ounce, while gold futures rose 0.4% to $2,050.95 an ounce by 00:24 ET (05:24 GMT). Both instruments tumbled about 1% in the first two days of 2024. 

Gold deepened its losses on Wednesday, while the dollar extended a rebound after the minutes of the Fed’s December meeting gave few cues on when the bank would begin trimming rates this year.

While most Fed officials saw interest rates falling by as much as 75 basis points in 2024, there appeared to be little consensus over the timing of the rate cuts.

The central bank acknowledged the progress it had made towards bringing down inflation with its rate hikes over the past year. But several policymakers still noted the need for tight monetary policy in the near-term, citing increased uncertainty over the U.S. economic outlook.

While the U.S. economy is cooling, inflation still remains above the Fed’s 2% annual target. The labor market is also running relatively strong, with nonfarm payrolls data due this Friday expected to provide more