Gold gains as traders await Fed minutes, US jobs data

Bengaluru — Gold prices edged higher on Wednesday as investors looked forward to minutes from the Federal Reserve’s latest policy meeting and US jobs data for more clarity on the central bank’s interest rate outlook.

Spot gold was up 0.3% at $2,064.55/oz, as of 0454 GMT. US gold futures were flat at $2,073.The dollar slipped 0.2% against its rivals, making gold less expensive for other currency holders.

“Gold is in consolidation mode at the moment, really building on those 2023 gains with potentially more to come should the current expectations for a dovish Fed in 2024 hold,” said Tim Waterer, chief market analyst at KCM Trade.

Traders have doubled down on bets for interest rate cuts in 2024, encouraged by slowing inflation and a dovish tilt by the Fed at its December policy meeting.

Those rate-cut expectations helped gold to post a 13% jump in 2023, its first annual gain since 2020. Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

Focus now shifts to the minutes of the US central bank’s December policy meeting to be released at 1900 GMT. Futures markets see a 70% chance of a 25-basis-point rate cut at the March 20 meeting, according to CME’s FedWatch Tool.

Investors are keenly awaiting a slew of US economic data this week, including non-farm payrolls report on Friday that may influence whether the Fed begins to cut rates in March as markets expect.

“There is certainly a chance we could see gold going to $2,100 per ounce in the near term,” Waterer said.

Investors are also keeping a close watch on tensions in the Middle East after Israel killed Hamas deputy leader Saleh al-Arouri in a drone strike in Lebanon’s capital Beirut on Tuesday.

Spot silver edged up 0.1% to $23.65/oz, while platinum was flat at $981.59. Palladium rose 0.7% to $1,088.24.

Reuters