Feb 15 (Reuters) – Gold prices held near a two-month low on Thursday, as traders assessed U.S. Federal Reserve officials’ mixed remarks on January’s hotter-than-expected inflation data that triggered a pull back on hopes of early and deeper interest rate cuts.
FUNDAMENTALS
* Spot gold XAU= was flat at $1,992.77 per ounce (Oz), as of 0157 GMT, after hitting its lowest since Dec. 13 on Wednesday.
* U.S. gold futures GCcv1 were also flat at $2,004.60/Oz.
* The Fed’s path back to its 2% inflation target rate would still be on track even if price increases run a bit hotter-than-expected over the next few months, and the central bank should be wary of waiting too long before it cuts interest rates, Chicago Fed President Austan Goolsbee said on Wednesday.
* Goolsbee’s remarks came after an upside surprise in U.S. inflation on Tuesday showed the consumer price index (CPI) rose 3.1% on an annual basis, above forecasts for a 2.9% increase.
* Bullion slid about 1.4% after the CPI data, in its biggest daily decline since Dec. 4.
* Fed Vice Chair for Supervision Michael Barr said the Fed remained confident, but the January CPI numbers shows the United States’ path back to 2% inflation “may be a bumpy one.”
* Traders are pricing in roughly 97 basis points (bps) of rate cuts for this year, up from about 85 bps early on Wednesday, with the first likely arriving in June now. Fed’s “dot plot” released in December projected three quarter-point rate cuts in 2024.
* Focus is now on U.S. retail sales data due at 1330 GMT and producer price index (PPI) numbers due on Friday. At least 3 Fed officials are due to speak for the week.
* Spot platinum XPT= fell 0.3% to $886.46/Oz, palladium XPD= dropped 0.5% to $929.72, and silver XAG= slipped 0.1% to $22.35.
DATA/EVENTS (GMT)
0700 UK GDP Estimate Dec
1100 Euro Zone Reserve Assets Total Jan
1315 Canada House Starts Jan
1330 US Initial Jobless Claims w/e Feb. 10
1330 US Phily Fed Business Indx Feb
1330 US Retail Sales Jan
1330 US NY Fed Manufacturing Feb
1330 US Import Prices Jan
1415 US Industrial Production Jan
1500 US Housing Mkt Indx Feb
1815 US Fed’s Waller speaks —
2359 US Fed’s Bostic speaks —
(Reporting by Harshit Verma in Bengaluru; Editing by Rashmi Aich)
((Harshit.Verma@thomsonreuters.com;))
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