Gold prices remained within a narrow range in Asian trade on Tuesday as investors awaited a series of upcoming economic data for trading cues. The yellow metal continued to trade mostly between $2,000 and $2,050 per ounce, establishing a range over the past two months. The near-term outlook for gold is constrained by the potential for higher U.S. interest rates, as Federal Reserve officials signaled a reluctance to loosen policy due to persistent inflation.
Spot gold edged up 0.1% to $2,033.36 per ounce, while gold futures expiring in April rose 0.2% to $2,042.60 per ounce. Investors are eagerly anticipating key U.S. economic data, including the PCE price index (the Fed’s preferred inflation gauge) on Thursday and a second reading on fourth-quarter GDP data. The data is expected to provide insights into the trajectory of inflation and the economic conditions, influencing gold’s movement.
The prospect of higher interest rates poses challenges for non-yielding assets like gold, as it increases the opportunity cost of holding the precious metal. Analysts from UBS maintain that while the near-term outlook for gold is muted, the metal is poised to strengthen later in the year, particularly as U.S. interest rates eventually decline. UBS maintains its year-end gold price forecast at $2,250 per ounce for 2024 and $2,050 per ounce by June 2024.