* Fed’s Bowman: inflation will decline with rates held
steady
* Bullion hit its lowest since June 10 on Wednesday
* U.S. PCE data due on Friday
June 27 (Reuters) – Gold prices steadied on Thursday
after falling to a two-week low in the previous session, while
investors awaited U.S. inflation data for insights into how soon
the Federal Reserve will cut interest rates.
Spot gold unchanged at $2,299.55 per ounce, as of
0255 GMT. Bullion fell to its lowest since June 10 on Wednesday.
U.S. gold futures fell 0.1% to $2,310.20.
The dollar hovered near a eight-week high, making
bullion more expensive for other currency holders, while
benchmark 10-year yields also held firm.
“The ascent by the U.S. dollar accompanied by rising bond
yields have left the gold price swimming against the tide,” said
Tim Waterer, chief market analyst at KCM Trade.
Fed Governor Michelle Bowman on Wednesday reiterated her
baseline view that “inflation will decline further with the
policy rate held steady,” and that rate cuts will “eventually”
be appropriate if inflation does move sustainably toward 2%.
Data due this week include the U.S. first-quarter gross
domestic product estimates are due at 1230 GMT and the personal
consumption expenditures (PCE)inflation data on Friday.
“If the core PCE print leaves financial markets pessimistic
about when that first Fed interest rate cut may occur, gold
could slip back towards $2,270 level,” Waterer added.
While bullion is considered an inflation hedge, higher rates
increase the opportunity cost of holding the non-yielding asset.
“Gold prices remain tangled in a tug of war between a less
dovish Fed and high levels of geopolitical tension,” analysts at
BMI said in a note dated Wednesday.
“The main driver of easing gold prices in the longer term
will be greater risk-on sentiment as the global economy recovers
in the later part of the decade.”
Spot silver fell 0.1% to $28.74, platinum was
down 0.3% to $1,007.33, while palladium gained 0.2% to
$930.39.
(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing
by Janane Venkatraman
)