Gold dips as traders await further US economic data

14 Mar 2024 , 10:16 AM

Due to a generally weaker dollar, gold prices remained unchanged during the first part of Asian trading hours on Thursday while traders awaited additional economic data that could heighten expectations for a rate cut by the US Federal Reserve at the halfway point of the year.

Spot gold was unchanged at $2,173.89 an ounce. The price of US gold futures fell 0.1% to $2,178.20.

At its policy meeting next week, the Fed is anticipated to keep rates unchanged, but the ‘dot plot’ projections will be the main topic of discussion. At its December meeting, the U.S. central bank set a three-quarter-point rate decrease for 2024.

Investors will assess the state of the U.S. economy and whether it will prevent the Fed from lowering rates in June by focusing on the producer pricing index (PPI) report, the jobless claims data that is scheduled later in the day, and U.S. retail sales data.

According to LSEG’s interest rate probability app, traders anticipate a 67% chance of a June rate drop, down from a 72% chance prior to data showing U.S. consumer prices climbed marginally above market expectations in February, indicating some stickiness in inflation. There is an 83% chance of a rate cut in July.

The U.S. dollar index steadied after losing all of its gains from Wednesday’s robust inflation report. However, 10-year Treasury rates continued to rise, hitting 4.1899% after reaching 4.5 basis points in the previous session.

The largest exchange-traded fund backed by gold in the world, SPDR Gold Trust, reported that its holdings increased by 0.21% to 816.86 tonnes on Wednesday from 815.13 tonnes on Tuesday.

Spot platinum increased 0.4% to $942.05 an ounce, palladium increased 0.1% to $1,060.25, while silver remained stable at $25.05 following a session in which it reached a high of more than four months.

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