Spot gold was little changed at $2,170.68 per ounce, U.S. gold futures shed 0.3% to $2,170.70 per ounce
Gold prices were stuck in a tight range on Tuesday as investor focus turned to U.S. inflation data due later this week, which could shed more light on the timing of the Fed’s first interest rate cut in 2024.
Spot gold was little changed at $2,170.68 per ounce, as of 0712 GMT. U.S. gold futures shed 0.3% to $2,170.70 per ounce.
We are lacking fresh catalysts, but for now the market seems to be consolidating – taking the proverbial breath after a fairly aggressive run, according to Kyle Rodda, a financial market analyst at Capital.com.
The next move probably hinges on this week’s personal consumption expenditure index release. Evidence of further disinflation in the U.S., which would ease fears of prices accelerating or at least re-anchoring at a higher level, would be very bullish for gold, Rodda added.
Gold reached a record high last week after Fed policymakers indicated they still expected to lower interest rates by three-quarters of a percentage point by 2024 end despite recent high inflation data.
Chicago Fed President Austan Goolsbee said on Monday that at the Fed’s policy meeting last week he pencilled in three rate cuts for 2024.
Meanwhile, Fed Governor Lisa Cook cautioned the U.S. central bank needs to proceed carefully as it decides when to begin cutting rates.
Investors now look forward to U.S. core PCE price index data due on Friday. The index was seen rising 0.3% in February, which would keep the annual pace at 2.8%.
Traders are pricing in a 70% chance that the Fed will begin reducing rates in June, per the CME Group’s FedWatch Tool.
The dollar index, meanwhile, shed 0.3% against its rivals, making gold less expensive for other currency holders.
