Gold prices remained steady on Thursday, and have held ground so far this month, despite bleak hopes for swift and deeper rate cuts in the United States as traders await a key US inflation reading due later in the day.
Spot gold was steady at $2,035.78 per ounce. US gold futures edged 0.1 percent higher to $2,044.20.
“The personal consumption expenditures (PCE) data is significant, with an upside surprise bringing downside risk for gold … bullion is range-trading at the moment and it’s a surprise that it’s holding up this well,” said Kyle Rodda, a financial market analyst at Capital.com.
Gold is holding firm on a month-on-month basis despite traders trimming bets to three quarter-point rate cuts in the US for 2024, from bets of five cuts a month ago. Hopes of the first cut arriving in May have receded this month, and a cut is now expected in June.
The US dollar index climbed 0.6 percent and benchmark 10-year Treasury yields gained over 30 basis points (bps), so far in February.
Fed officials this week said there’s still some distance left to cover in achieving the 2 percent inflation target, but the door is opening for interest rate cuts, which could likely arrive later this year.
