Gold struggled near a two-month low on Thursday, as investors assessed comments from two US Federal Reserve officials on unexpectedly high January inflation that has tempered hopes for swift and deeper interest rate cuts this year.
Spot gold was flat at $1,991.70 per ounce (Oz), after hitting its lowest since Dec. 13 on Wednesday. US gold futures were flat at $2,003.40/Oz.
“After a sharp fall in gold prices (on Wednesday), we see some consolidation. But today’s (economic) data points will give more clarity,” said Ajay Kedia, director at Kedia Commodities in Mumbai.
“The dollar’s move would be important to watch as it may retest its highs, weakening gold prices.”
The US dollar index held below a three-month peak. A stronger dollar makes gold more expensive for buyers in other currencies.
Fed Vice Chair for Supervision Michael Barr backed the “careful approach” to cutting rates advocated by Chair Jerome Powell, while Chicago Fed President Austan Goolsbee warned against waiting too long.
