Gold Prices Show Minimal Movement Amid Central Bank Announcements and US Economic Data

23 Jan 2024 , 08:37 AM

On Tuesday, gold prices exhibited limited fluctuations as traders adopted a cautious stance ahead of impending interest rate announcements by several central banks and a flurry of upcoming US economic data releases.

Spot gold saw a marginal 0.1% decline, settling at $2,019.89 per ounce, while US gold futures recorded a similar 0.1% dip, reaching $2,021.00.

The US dollar index remained relatively steady throughout the day, maintaining proximity to its peak of 103.69 established over a month ago.

Chinese markets experienced continued declines, contrasting with Japanese equities that achieved new 34-year highs as investors expressed confidence in the Bank of Japan maintaining its accommodative policies.

Meanwhile, expectations are high that the European Central Bank (ECB) will uphold its existing monetary policy during its upcoming Thursday meeting.

Federal Reserve officials indicated a potential commencement of rate decreases in the third quarter, emphasizing the need for additional inflation data before making any decisions about rate cuts.

The Federal Reserve, currently in a pre-meeting lockdown, is anticipated to keep rates unchanged during its January 30-31 meeting. Traders, as reflected by LSEG’s interest-rate probability software, priced in 134 basis points of rate reduction for the year, down from 150 bps two weeks ago.

Investors are closely monitoring key events, including the U.S. flash PMI survey on Wednesday, advance GDP estimates for the fourth quarter on Thursday, and data on personal consumption expenditures scheduled for Friday.

Holding onto bullion becomes more attractive when interest rates are lower. Spot silver observed a 0.2% decrease to $22.05 per ounce, palladium dipped by 0.3% to $933.64, while platinum recorded a marginal 0.1% increase, reaching $893.64.

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