Gold prices held steady on Friday as investors’ attention shifted to the US Federal Reserve’s policy meeting due next week for more insights into the interest rate outlook.
Spot gold was little changed at $2,016.95 per ounce, down 0.6 percent so far this week.
US gold futures settled mostly flat at $2,017.3.
“We are seeing the gold market consolidating at the moment as the expectations of rate declines aren’t quite as soon as the market would like,” said David Meger, director of metals trading at High Ridge Futures.
“But underlying theme or the idea that interest rates will come down in 2024 continues to underpin and support the gold market.”
Markets widely expect the Fed to leave interest rates unchanged at its policy meeting on Jan. 30-31, but have pared back expectations of a rate cut by March, according to the CME FedWatch Tool.
Lower interest rates decrease the opportunity cost of holding bullion.
US prices rose moderately in December, keeping the annual increase in inflation below 3 percent for a third straight month, which could allow the Fed to start cutting interest rates this year. Another set of data on Thursday showed the US economy grew faster than projected in the fourth quarter.
