Gold prices moved little in Asian trade on Wednesday, retaining most of their losses from the prior week as the precious metal continues to trade sideways. Spot gold steadied at $2,035.12 an ounce by 11:00 GMT ahead of Thursday’s release of December US consumer price index data.
The upcoming inflation figures could provide further evidence on whether the Federal Reserve will maintain its hawkish stance on interest rates going forward.
Despite surging over 10% since the start of the year, gold prices have pulled back over the past week as traders scale back bets of a Fed rate cut as early as March 2024. According to the CME Fedwatch tool, the probability of a 25 basis point reduction in March now stands at 63.6%, down from 69.6% last week.
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Several Fed officials have also pushed back against expectations of early easing. Markets are looking for signs of sticky inflation in tomorrow’s CPI release, which could see the central bank keep rates higher for longer. Higher rates tend to weigh on non-yielding assets like gold.