Gold prices showed little movement in Asian trading on Thursday, as traders adopted a wait-and-see approach ahead of key U.S. inflation data that is expected to influence interest rate decisions. The yellow metal faced pressure from Federal Reserve officials’ comments, emphasizing the need for more efforts to tackle inflation. Concerns about prolonged higher interest rates have kept gold within a $2,000 to $2,050 per ounce range for almost two months.
Spot gold steadied at $2,035.26 per ounce, while gold futures expiring in April remained flat at $2,043.45 per ounce by 00:38 ET (05:38 GMT).
Investor focus turned to the Personal Consumption Expenditures (PCE) price index data, the Fed’s preferred inflation measure, scheduled for release later in the day. The reading is anticipated to reinforce the notion of persistent inflation in January. Recent statements from Fed officials, including John Williams and Raphael Bostic, indicated the need for additional efforts to reach the central bank’s 2% inflation target. These comments have cast doubt on expectations of an early 2024 rate cut by the Fed.
Traders are currently pricing in a 52.6% chance of a rate cut in June. The potential for higher interest rates could keep the dollar strong, putting additional pressure on gold and other precious metals. While platinum futures rose 0.5% to $888.40 per ounce and silver futures gained 0.3% to $22.705 per ounce, both metals were on track to end February with losses. Gold, however, was set to finish the month unchanged.
In the industrial metals sector, copper prices remained within a narrow range on Thursday. The focus shifted to upcoming economic indicators from China, the world’s largest copper importer. Copper futures expiring in March rose 0.4% to $3.8540 per pound, but were poised to register a 1.3% decline for February, ending a three-month winning streak. Investors awaited China’s Purchasing Managers Index (PMI) readings for insights into the economic conditions of the major copper importer.