Gold in a tight range as traders await Fed rate decision

by Jonathan Adams
Gold

Spot gold held its ground at $2,032.15 per ounce, and U.S. gold futures gained 0.3% to $2,031.00

Gold prices were in a tight range on Tuesday as traders awaited the U.S. Federal Reserve’s decision on key policy rates and remarks from Chair Jerome Powell.

Spot gold held its ground at $2,032.15 per ounce by 0419 GMT.

U.S. gold futures gained 0.3% to $2,031.00.

Traders are waiting for the U.S. Federal Reserve’s policy outlook and key jobs data this week, and that is strengthening gold prices, but prices can be expected to edge marginally on the positive side on Tuesday because of geopolitical tensions in the Middle East, said Ajay Kedia, director at Kedia Commodities.

Markets widely expect the Fed to stand pat on rates at its two-day policy meeting that starts later in the day, but attention will largely be on comments from Fed chair Powell on Wednesday.

Traders are betting on five quarter-point rate cuts for 2024 in the US, with the first of those coming at a coin flip chance in March, as per LSEG’s interest rate probability app IRPR.

A Reuters poll showed on Monday that uncertainty about the economy and U.S. interest rate cuts could drive record gold prices this year.

The dollar index weakened 0.2%, which generally makes gold more attractive to holders of other currencies. Yields on the benchmark U.S. Treasury note hit a two-week low of 4.0550%.

Spot silver dropped 0.2% to $23.15 per ounce.

Analysts and traders have downgraded their price forecasts for platinum and palladium in 2024 as demand struggles to increase considerably, but they still expect prices for both to bounce back from current levels.

Spot platinum declined 0.2% to $924.85 an ounce, while palladium shed 0.2% to $981.48.

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