Gold Holds Its Breath Before Inflation Verdict

10 Jan 2024 , 08:52 AM

In anticipation of a significant U.S. inflation report that may provide additional insight into the timing of potential interest rate cuts by the Federal Reserve, investors refrained from placing large wagers, which kept gold prices stable on Wednesday.

Spot gold increased by 0.1% to $2,031.30 per ounce, moving within a $4 range.

American gold futures increased by 0.2% to $2,036.90 an ounce. While the dollar index continued to rise and the yield on 10-year U.S. Treasury notes stayed above 4%, the price of gold remained unchanged.

Investors are anticipating the release of the U.S. consumer price inflation report on Thursday, which is predicted to reveal headline inflation increased by 3.2% annually and by 0.2% in the month.

Consumers anticipate lower inflation, according to an official U.S. report, while Fed Governor Michelle Bowman said the country’s monetary policy seemed ‘sufficiently restrictive’.

The opportunity cost of owning non-yielding bullion is reduced by lower interest rates.

The CME FedWatch tool indicates that market players are pricing in a roughly 62% possibility of a rate drop by the US Federal Reserve in March.

November saw a dramatic decline in core inflation in Australia and a slowdown in overall inflation that was closer to a two-year low. These less-than-expected results supported market expectations that interest rates would not need to climb further.

The benchmark Nikkei average in Japan began 0.4% higher, while Australian shares declined, led by mining and gold sectors

Spot silver was stable at $22.96 an ounce, while palladium climbed 0.5% to $983.39 and platinum increased 0.2% to $931.75.

For feedback and suggestions, write to us at [e-mail]