Gold prices steady as traders brace for US inflation data

Gold prices held ground on Thursday as traders awaited the Federal Reserve’s preferred inflation gauge due later in the day that could provide a fresh perspective into when the U.S. central bank could start cutting interest rates.

FUNDAMENTALS

* Spot gold was steady at $2,035.78 per ounce, as of 0210 GMT. U.S. gold futures edged 0.1% higher to $2,044.20.

* Data on Wednesday showed the U.S. economy grew at a solid clip in the fourth quarter amid strong consumer spending, but appeared to have lost some speed early this year.

* New York Fed President John Williams said even as there’s still some distance to cover in achieving the U.S. central bank’s 2% inflation target, the door is opening to interest rate cuts this year depending on how the data come in.

* Boston Fed President Susan Collins said the Fed will likely need to start cutting rates later this year.

* At least seven more Fed officials are due to speak on Thursday and Friday.
* Traders are betting on about 81 basis points (bps) of rate cuts for 2024, with a 63% chance of the first quarter-point (25 bps) cut coming in June, according to LSEG’s interest rate probability app IRPR.
* Lower interest rates boost the appeal of holding non-yielding bullion.

* Markets now await a key inflation reading – the core personal consumption expenditures (PCE) price index – at 1330 GMT.

* Spot silver rose 0.2% to $22.51 per ounce, and platinum climbed 0.3% to $880.89, while palladium fell 0.2% to $926.97.

DATA/EVENTS (GMT) 0745 France CPI Prelim Feb 0855 Germany Unemployment rate Feb 1330 US PCE Price Index Jan 1330 US Weekly jobless claims w/e Feb. 24 1445 US Chicago PMI Feb 1500 US Pending home sales Jan 1515 US Fed’s Waller speaks — 1550 US Fed’s Bostic speaks — 1600 US Fed’s Goolsbee speaks — 1815 US Fed’s Mester speaks —