Gold Prices Steady as Traders Eye Key US Inflation Report

SEATTLE (Scrap Monster):  Gold prices were steady on Thursday, as traders held back from taking fresh positions ahead of key U.S. inflation data due later in the day, which could provide more clues into the Federal Reserve's interest rate trajectory.

Spot gold was steady at $2,036.42 per ounce, as of 0701 GMT. U.S. gold futures edged 0.1% higher to $2,045.00.

 Spot gold was little changed on a month-on-month basis so far, after logging a 1.2% decline in January.

"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.

The U.S. PCE inflation data - the Fed's favoured measure of inflation - is due at 1330 GMT.

Fed officials this week said there's still some distance left to cover in achieving the 2% inflation target, but the door is opening for interest rate cuts, which could likely arrive later this year.

Lower interest rates boost the appeal of holding non-yielding bullion.

At least seven more Fed officials are due to speak on Thursday and Friday.

Traders have trimmed bets to three quarter-point rate cuts in the U.S. for 2024, from bets of five cuts a month ago. Hopes of the first cut arriving in May have also receded this month, and a cut is now expected in June.

The U.S. dollar index climbed 0.6% and benchmark 10-year Treasury yields gained over 30 basis points (bps), so far in February.

 A stronger dollar makes gold more expensive for other currency holders, while higher bond yields lower bullion's appeal by increasing the opportunity cost of holding the precious metal.

Spot silver rose 0.3% to $22.53 per ounce, platinum climbed 0.5% to $882.51, and palladium jumped 0.8% to $935.93.

Courtesy: www.reuters.com