Gold prices set for monthly drop; spotlight on US Fed meet
GOLD prices were on track for their first monthly decline in four as investors toned down their estimate of rapid and deeper rate cuts in the United States on the face of a resilient economy, and awaited remarks from the US Federal Reserve due later in the day.
Spot gold was flat at US$2,035.09 per ounce by 0141 GMT on Wednesday (Jan 31), after touching a two-week high of US$2048.12 in the previous session.
Spot prices have dropped 1.3 per cent so far this month.
US gold futures rose 0.2 per cent to US$2,034.60.
Traders priced in about 130 basis points (bps) of Fed rate cuts for this year, down from bets of more than 160 bps at the end of 2023, according to LSEG’s interest rate probability app IRPR.
Money market pricing shows that the chances of a March rate cut have dropped to 43 per cent, from about 90 per cent a month ago.
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The US dollar index was on track to mark its best month since September, with an over 2 per cent gain so far in January.
Yields on benchmark US Treasury notes were at a two-week low of 4.0261 per cent, but still higher than the year-end close of 3.8600 per cent.
Market focus will shift to Fed’s statement at the end of its two-day policy meeting at 1900 GMT, where it is expected to leave rates unchanged, which is followed by a news conference by chair Jerome Powell at 1930 GMT.
Data on Tuesday showed that US job openings unexpectedly rose in December while US consumer confidence increased to a two-year high in January.
Spot silver fell 0.2 per cent lower to US$23.12 per ounce, platinum was steady at US$920.57, and palladium edged 0.1 per cent lower to US$975.49. All three were also poised for a monthly decline. REUTERS
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