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May 27, 2024
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PRECIOUS-Gold drifts higher as dollar slips ahead of cenbanks’ verdicts

By Harshit Verma

Jan 23 (Reuters)Gold prices rose on Tuesday, as the U.S. dollar edged lower while investors awaited interest rate decisions from a number of central banks and a slew of economic data in the United States this week.

Spot gold XAU= rose 0.3% to $2,026.19 per ounce by 0350 GMT.

U.S. gold futures GCcv1 rose 0.3% to $2,027.50.

The U.S. dollar index .DXY fell 0.1%, making greenback-priced gold more attractive to other currency holders.

Gold is treading water until it gets the next clues as to when the Federal Reserve may pull the trigger on the first rate cut, Tim Waterer, chief market analyst at KCM Trade, said.

The Bank of Japan kept ultra-low interest rates intact in a widely expected move. The European Central Bank (ECB) meets on Thursday and is expected to hold monetary policy steady. MKTS/GLOB

Federal Reserve officials last week said the U.S. central bank in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter.

Traders priced in five rate cuts for this year, down from six cuts two weeks ago. The first cut, initially expected in March, is now expected in May with an 87% probability, according to LSEG’s interest-rate probability app IRPR.

Lower interest rates decrease the opportunity cost of holding bullion.

“If central banks continue to counter the prevailing narrative that rate cuts will occur sooner rather than later, this could pressure the gold price from a yield perspective,” KCM Trade’s Waterer said.

Investors will also be watching out for U.S. flash PMI report on Wednesday, fourth-quarter advance GDP estimates due on Thursday and personal consumption expenditures data on Friday, before the Fed’s next meeting on Jan. 30-31.

Spot silver XAG= rose 0.8% to $22.25 per ounce, platinum XPT= rose 0.6% to $898.07, and palladium XPD= rose 0.2% to $938.74.

Spot gold price in USD per oz https://reut.rs/429dIoY

(Reporting by Harshit Verma in Bengaluru; Editing by Rashmi Aich and Mrigank Dhaniwala)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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