Gold Prices Hold Steady Ahead of U.S. Inflation Data

13 Sep 2023 , 09:46 AM

Gold prices remained stable on Wednesday, trading above the recent two-week low experienced in the previous session, as investors anticipated U.S. inflation data that could influence expectations regarding the Federal Reserve’s stance on interest rates.

At 0059 GMT, spot gold held steady at $1,912.59 per ounce, while U.S. gold futures also remained unchanged at $1,934.80. The dollar index, in comparison, slipped 0.1% against its counterparts, providing some support to gold prices. This support came after bullion prices had dipped on Tuesday to their lowest level since August 25, reaching $1,906.50.

It is expected that the Federal Reserve will maintain its benchmark overnight interest rate at the conclusion of its policy meeting on September 19-20. It is likely that any rate cuts will be deferred until the period between April and June of 2024 or later.

The U.S. Census Bureau reported a decline in inflation-adjusted income and a significant increase in a key poverty measure for the previous year. This occurred as the U.S. economy continued its gradual recovery from a once-in-a-century pandemic.

Japan’s annual wholesale inflation also showed a slowdown in August for the eighth consecutive month, as indicated by the latest data on Wednesday.

Furthermore, the European Central Bank anticipates that inflation in the 20-nation eurozone will remain above 3% in the coming year. This strengthens the case for a tenth consecutive interest rate hike, which is expected to occur on Thursday, according to sources with direct knowledge of the discussion cited by Reuters.

In the broader market, spot silver saw a 0.2% decline to $23.06 per ounce, platinum dropped 0.3% to $907.77, and palladium decreased by 0.2% to $1,238.20.