Gold keeps level, with focus on upcoming US Fed rates decision

Gold prices flitted in a tight range on Wednesday, ahead of speeches by US Federal Reserve officials through the week that could give further cues on when the US central bank may start easing its monetary policy.

Spot gold was at $2,034.39/oz as of 5.35am GMT, having moved in a roughly $2 range. Prices increased more than 0.5% in the previous session.

US gold futures were also steady at $2,050.20/oz.

There is no catalyst to move prices at the moment but traders are watching this minor risk event that some Fed officials are due to speak later in the day, said Kelvin Wong, a senior market analyst for Asia Pacific at Oanda.

“If gold manages to hold above $2,015/oz in the short term, we could see price retesting the psychological resistance at $2,060/oz that has been in place since early January this year.”

Fed officials said on Tuesday that if the US economy performs as expected, it could open the door to interest rate cuts.

But they cautioned that the fight against inflation is “not done yet” and that the Fed could take its time before lowering rates, reiterating what chair Jerome Powell said on Sunday.

High interest rates increase the opportunity cost of holding bullion, decreasing its appeal among other assets.

At least five more Fed officials are due to speak this week.

Stronger-than-expected jobs and services sector data prompted traders to pare back bets of a May US rate cut. They are now expecting four quarter-point cuts in 2024, according to LSEG’s interest rate probability app IRPR.

The dollar index edged 0.1% lower, making bullion more appealing for other currency holders.

Spot silver slipped 0.6% to $22.28/oz, platinum fell 0.5% to $899.11/oz, while palladium dropped 0.8% to $943.08/oz.