The spot gold price settled little changed at $2,170.68 per ounce Gold prices remained stuck in a tight range on Tuesday, as investors turned focus to US inflation data due later this week, which could shed more light on the timing of the Federal Reserve’s first interest rate cut this year. The spot gold price stabilized without significant changes at $2,170.68 per ounce, starting at 07:12 (GMT). US gold futures fell by 0.3 percent to $2,170.70 an ounce, according to Reuters.
Kyle Rudd, a financial market analyst at Capital.com, said: “We are missing new catalysts, but at the present time it seems that the market is heading towards consolidation, catching its breath after a fairly strong rise.” He added: “The next step will likely depend on the release of the core personal consumption expenditures index this week.” “Evidence of further deflation in the US, which would ease fears of accelerating prices, or at least hold them at a higher level, would be very positive for gold.”
Gold hit a record high last week, after Federal Reserve policymakers indicated they still expect to cut interest rates by three-quarters of a percentage point by the end of 2024, despite recent high inflation readings. Chicago Federal Reserve Bank President Austin Goolsbee said on Monday that during the Federal Policy Meeting last week, he had identified 3 rate cuts this year. At the same time, US Federal Reserve member Lisa Cook warned that the US Central Bank needs to proceed cautiously as it decides when to start cutting interest rates.
Traders are pricing in a 70 percent chance that the Federal Reserve will start cutting interest rates in June, according to CME Group’s FedWatch tool. Low interest rates reduce the opportunity cost of holding bullion. Meanwhile, the dollar index fell 0.3 percent against other currencies, making gold less expensive for holders of other currencies. Spot silver fell 0.6 percent to $24.53 per ounce, platinum fell 0.1 percent to $901.75, and palladium rose 0.1 percent to $1,006.18.