Gold on hold: Traders pause for key US inflation data

29 Feb 2024 , 11:32 AM

As investors awaited the release of the Federal Reserve’s preferred inflation gauge later in the day, which may offer new insight into when the American central bank may begin reducing interest rates, gold prices remained steady on Thursday.

Spot gold was unchanged at $2,035.78 an ounce. US gold futures increased by 0.1% to $2,044.20.

According to data released on Wednesday, the U.S. economy expanded steadily in the fourth quarter thanks to high consumer spending, but it seems to have slowed down early this year.

New York Fed President John Williams stated that although there is still work to be done to reach the American central bank’s 2% inflation target, interest rate decreases may occur this year, contingent upon the quality of the data. 

Susan Collins, president of the Boston Fed, stated that rate reductions by the Fed are probably inevitable later this year.

On Thursday and Friday, at least seven other Fed officials are scheduled to speak.

Based on LSEG’s interest rate probability software, IRPR, traders are speculating on roughly 81 basis points (bps) of rate reductions for 2024, with a 63% probability that the first quarter-point (25 bps) decrease would occur in June. 

Having non-yielding bullion becomes more appealing when interest rates are lower. 

The markets are waiting for the core personal consumption expenditures (PCE) price index, a crucial indicator of inflation.

Spot silver increased 0.2% to $22.51 per ounce, palladium decreased 0.2% to $926.97, and platinum increased 0.3% to $880.89. 

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