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February 22, 2024
PI Global Investments
Gold

Gold holds ground ahead of US inflation data


“A combination of stability in the U.S. dollar and bond yields, in contrast to what we witnessed at the tail-end of 2023, has effectively applied the brakes to the gold price,” said Tim Waterer, chief market analyst at KCM Trade.

The dollar index ticked up against a basket of currencies, and is up 1.6% so far this month, while yields on 10-year U.S. Treasury notes remained above 4%. [USD/]

Traders will turn their focus to Thursday’s U.S. consumer price inflation report that is expected to show headline inflation rose 0.2% in December and 3.2% on an annual basis.,

“Any signs of softness in the data could be a boon for the gold price,” said Waterer.

An official U.S. report revealed that consumers expect a decline in inflation, while Fed Governor Michelle Bowman said the U.S. central bank’s monetary policy seems “sufficiently restrictive”.

Market participants are pricing in an about 68% chance of a U.S. rate cut in March, according to the CME FedWatch tool.

Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

Spot gold may retest support of $2,016 per ounce, a break below which could open the way towards $2,006, according to Reuters technical analyst Wang Tao. [TECH/C]

Spot silver fell 0.2% to $22.93 per ounce, while platinum rose 0.2% to $931.74, and palladium gained 0.7% to $985.48.

(Reporting by Harshit Verma in Bengaluru; Editing by Rashmi Aich and Sonia Cheema)

Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.



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