Gold firms on softer dollar, focus on US inflation data
Tue Mar 26 2024
Gold prices inched higher on Tuesday, buoyed by a weaker dollar as investor focus turns to U.S. inflation data due later this week, which could shed more light on the timing of the Federal Reserve's first interest rate cut this year.
* Spot gold was up 0.1% at $2,172.82 per ounce, as of 0122 GMT.
* U.S. gold futures edged 0.1% lower to $2,173.70 per ounce.
* The dollar index
slipped 0.3% against its rivals, making gold less expensive for other currency
holders.
* Gold prices hit a record high last week after Fed policymakers indicated they
still expected to reduce interest by three-quarters of a percentage point by
2024 end despite recent high inflation readings.
* Chicago Fed Bank President Austan Goolsbee said on Monday that at the Fed's
policy meeting last week he penciled in three rate cuts for this year.
* Meanwhile, Fed Governor Lisa Cook cautioned the U.S. central bank needs to
proceed carefully as it decides when to begin cutting interest rates.
* Investors now look forward to U.S. core personal consumption expenditure
price index data due on Friday. PCE price index is seen rising 0.3% in
February, which would keep the annual pace at 2.8%.
* Traders are pricing in a 70% probability that the Fed will begin cutting
rates in June, according to the CME Group's FedWatch Tool. Lower interest rates
reduces the opportunity cost of holding bullion.
* Spot gold may retest resistance at $2,183 per ounce, a break above which
could lead to a gain into $2,188-$2,196 range, according to Reuters' technical
analyst Wang Tao.
* Spot silver was flat at $24.68 per ounce, platinum rose 0.4% to $906.10 and
palladium gained 0.4% to $1,009.14.