Gold steadies as traders brace for US economic data

GOLD prices were steady on Wednesday (Jan 24) as investors awaited United States economic data that could offer more clues on the Federal Reserve’s depth and scale of interest rate cuts.

Spot gold edged 0.1 per cent lower to US$2,027.39 per ounce by 0156 GMT.

US gold futures, however, rose 0.1 per cent to US$2,028.40.

The US dollar index hovered near a six-week high, making bullion less appealing for other currency holders.

Yields on benchmark US 10-year Treasury notes held above 4 per cent.

Investors will be watching out for data that could shape the US Fed’s interest rate trajectory – starting with flash PMI report due later in the day, fourth-quarter advance GDP estimates on Thursday and personal consumption expenditures data on Friday.

Traders priced in five quarter-point rate cuts for 2024 in the US, down from six cuts two weeks ago.

The first rate cut by the Fed, initially expected in March, is now expected in May with an 89 per cent probability, according to LSEG’s interest-rate probability app IRPR.

Investors will also be watching out for European Central Bank (ECB) chief Christine Lagarde’s press conference on Thursday for clues on where rates are headed.

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Gold holds steady as central banks’ policy verdicts loom

Lower interest rates decrease the opportunity cost of holding bullion.

Fed officials last week said the US central bank needs more inflation data in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter.

Japan’s exports value surged to their biggest monthly record in December, official data showed, propelled by shipments to China rising for the first time in over a year and record sales to the US.

Spot silver was little unchanged at US$22.42 per ounce, platinum was flat at US$900.06, and palladium fell 0.2 per cent to US$946.18. REUTERS