Gold prices remained stable on Wednesday, pending the release of crucial inflation data in the United States. The data should shed more light on the potential timing of the Federal Reserve’s first interest rate cut this year.
Also read: Friday very important day for the gold price
Gold price stability
The spot gold price stagnated at 2 319,95 $ l’once at 03:37 GMT, while US gold futures held steady at 2 331,30 $. At the same time, the dollar rose 0.1% against its competitors, making gold more expensive for holders of other currencies. Yields on 10-year bonds have also risen.
Impact of Fed Comments
“Rising Treasury yields and a strengthening US dollar, following strong comments from the Fed, led to some weakness in gold prices this morning,” said one market strategist.
Michelle Bowman, Fed Governor, reiterated Tuesday that holding the key rate “for a period of time” would likely be enough to keep inflation in check, while expressing a willingness to raise borrowing costs if necessary. For his part, Lisa Cookalso governor of the Fed, stressed that it might be time to cut interest rates.
Expectations from economic data
The estimates of US gross domestic product for the first quarter are expected on Thursday, followed by the Personal Consumption Expenditures (PCE) price index on Friday.
“The risk comes from any upside surprises in inflation, which could generate more uncertainty regarding the Fed’s policies and lead to a further unwinding of the yellow metal,” added one expert.
Outlook for precious metals
Higher interest rates increase the opportunity cost of holding bullion without yield. “Gold price declines remain relatively shallow thanks to buyers pulling out of the price chase,” a chief market analyst said in a note. He also mentioned that the level of 2 368 dollars should be crossed for gold to surpass the highs reached last week.
Moreover, cash rose 0.1% to 28,94 dollarsthe platinum rose 0.8% to 989,70 dollarswhile the palladium fell by 0.5% to 943,49 dollars.
This economic context and expectations of Fed policies continue to influence precious metals prices, making every economic data crucial for investors.
