Gold listless as focus turns to US inflation report

Gold prices struggled for momentum in early Asian hours on Monday as investors looked forward to U.S. inflation data due later this week for more clarity on the Federal Reserve‘s interest rate path after a dovish pivot last week.

FUNDAMENTALS

* Spot gold was little changed at $2,019.49 per ounce, as of 0041 GMT. U.S. gold futures edged 0.1% lower to $2,033.20.

* The Fed held interest rates steady last week and signalled that the historic tightening of monetary policy engineered over the last two years is at an end and lower borrowing costs are coming in 2024.

* However, New York Fed President John Williams pushed back against surging market expectations of rate cuts, and said that “we aren’t really talking about rate cuts right now” at the Fed and it’s “premature” to speculate about them.

* Markets are now pricing in about a 70% chance of a Fed rate cut in March, according to CME FedWatch tool. Lower interest rates tend to support non-interest-bearing bullion.

* The Bank of Japan holds its policy meeting on Tuesday amid much chatter that it is considering how and when to move away from negative interest rates.
* Markets are awaiting a slew of U.S. economic data this week, including the November core personal consumption expenditure (PCE) index report on Friday.
* Analysts forecast core PCE to rise 0.2% last month, with the annual inflation rate slowing to its lowest since mid-2021 at 3.4%.

* Data on Friday showed U.S. business activity picked up in December amid rising orders and demand for workers, which could further help to allay fears of a sharp slowdown in economic growth in the fourth quarter.

* Spot silver eased 0.2% to $23.76 per ounce, while platinum gained 0.1% to $940.91 and palladium slipped 1.6% to $1,155.39.

DATA/EVENTS (GMT) 0900 Germany Ifo Business Climate New Dec 0900 Germany Ifo Curr Conditions New Dec 0900 Germany Ifo Expectations New Dec.