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June 20, 2024
PI Global Investments
Gold

Gold steadies as traders brace for US economic data


Gold prices were steady on Wednesday as investors awaited U.S. economic data that could offer more clues on the Federal Reserve’s depth and scale of interest rate cuts.

 

FUNDAMENTALS

* Spot gold edged 0.1% lower to $2,027.39 per ounce by 0156 GMT.

* U.S. gold futures, however, rose 0.1% to $2,028.40.

* The dollar index hovered near a six-week high, making bullion less appealing for other currency holders.

* Yields on benchmark U.S. 10-year Treasury notes held above 4%.

* Investors will be watching out for data that could shape the U.S. Fed’s interest rate trajectory – starting with flash PMI report due later in the day, fourth-quarter advance GDP estimates on Thursday and personal consumption expenditures data on Friday.

* Traders priced in five quarter-point rate cuts for 2024 in the U.S., down from six cuts two weeks ago.

* The first rate cut by the Fed, initially expected in March, is now expected in May with an 89% probability, according to LSEG’s interest-rate probability app IRPR.

* Investors will also be watching out for European Central Bank (ECB) chief Christine Lagarde’s press conference on Thursday for clues on where rates are headed.

* Lower interest rates decrease the opportunity cost of holding bullion.

* Fed officials last week said the U.S. central bank needs more inflation data in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter.

* Japan’s exports value surged to their biggest monthly record in December, official data showed, propelled by shipments to China rising for the first time in over a year and record sales to the U.S.

* Spot silver was little unchanged at $22.42 per ounce, platinum was flat at $900.06, and palladium fell 0.2% to $946.18.

DATA/EVENTS (GMT) 0815 France HCOB Flash PMI Jan 0830 Germany HCOB Flash PMI Jan 0900 Euro Zone HCOB Flash PMI Jan 0930 UK Flash PMI Jan 1100 UK CBI Business Optimisim Q1 1445 US S&P Flash PMI Jan 1445 Canada BoC Rate Decision — 2300 S. Korea GDP Growth Advance Q4 (Reporting by Harshit Verma in Bengaluru; Editing by Rashmi Aich)

 



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