Gold prices were steady on Wednesday as investors exercised caution ahead of a key US inflation print that could shed some light on the Federal Reserve’s rate cut trajectory.
Spot gold was little changed at $2,028.69 per ounce, trading in a range of about $6.
US gold futures rose 0.1 percent to $2,034.20 per ounce.
“A combination of stability in the US dollar and bond yields, in contrast to what we witnessed at the tail-end of 2023, has effectively applied the brakes to the gold price,” said Tim Waterer, chief market analyst at KCM Trade.
The dollar index ticked up against a basket of currencies, and is up 1.6 percent so far this month, while yields on 10-year US Treasury notes remained above 4 percent.
Traders will turn their focus to Thursday’s US consumer price inflation report that is expected to show headline inflation rose 0.2 percent in December and 3.2 percent on an annual basis.
“Any signs of softness in the data could be a boon for the gold price,” said Waterer.
An official US report revealed that consumers expect a decline in inflation, while Fed Governor Michelle Bowman said the US central bank’s monetary policy seems “sufficiently restrictive”.
