Gold holds ground on softer dollar, focus on US inflation data
GOLD prices held steady on Tuesday (Dec 19) helped by a weaker US dollar, as investors awaited more US economic data this week that could shed light on the US Federal Reserve’s monetary policy outlook amid surging market expectations of interest rate cuts.
Spot gold was flat at US$2,027.15 per ounce, as at 0105 GMT. US gold futures were unchanged at US$2,040.90.
The US dollar was down 0.1 per cent against its rivals, making gold less expensive for other currency holders.
The Fed last week signalled that the historic tightening of monetary policy engineered over the last two years is at an end and lower borrowing costs are coming in 2024.
The Fed is not precommiting to cutting interest rates soon and swiftly, and the jump in market expectations that it will do so is at odds with how the US central bank functions, Chicago Fed president Austan Goolsbee said on Monday.
Markets are now pricing in about a 69 per cent chance of a Fed rate cut in March, according to CME FedWatch tool. Lower interest rates tend to support non-interest-bearing bullion.
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Investors are awaiting a series of US economic data this week, including the November core personal consumption expenditure index report, the Fed’s preferred measure of underlying inflation, due on Friday.
Meanwhile, oil prices extended gains as attacks by Yemen’s Iran-aligned Houthi militants on ships in the Red Sea disrupted maritime trade and forced reroutes.
The Bank of Japan concludes its two-day monetary policy meeting later in the day, where it’s expected to maintain its ultra-loose monetary settings.
Spot silver gained 0.1 per cent to US$23.80 per ounce, while platinum rose 0.3 per cent to US$948.18 and palladium eased 0.2 per cent to US$1,181.85. REUTERS
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