Gold listless as focus turns to US inflation report
GOLD prices struggled for momentum in early Asian hours on Monday (Dec 18) as investors looked forward to US inflation data due later this week for more clarity on the US Federal Reserve’s interest rate path after a dovish pivot last week.
Spot gold was little changed at US$2,019.49 per ounce, as at 0041 GMT. US gold futures edged 0.1 per cent lower to US$2,033.20.
The Fed held interest rates steady last week and 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.
However, New York Fed president John Williams pushed back against surging market expectations of rate cuts, and said that “we aren’t really talking about rate cuts right now” at the Fed and it’s “premature” to speculate about them.
Markets are now pricing in about a 70 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.
The Bank of Japan holds its policy meeting on Tuesday amid much chatter that it is considering how and when to move away from negative interest rates.
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Markets are awaiting a slew of US economic data this week, including the November core personal consumption expenditure (PCE) index report on Friday.
Analysts forecast core PCE to rise 0.2 per cent last month, with the annual inflation rate slowing to its lowest since mid-2021 at 3.4 per cent.
Data on Friday showed US business activity picked up in December amid rising orders and demand for workers, which could further help to allay fears of a sharp slowdown in economic growth in the fourth quarter.
Spot silver eased 0.2 per cent to US$23.76 per ounce, while platinum gained 0.1 per cent to US$940.91 and palladium slipped 1.6 per cent to US$1,155.39. REUTERS
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