WASHINGTON (Reuters): Gold rates steadied on Tuesday as investors awaited a slew of US economic data this week for more clarity on the Federal Reserve’s interest rate cut timeline.
Spot gold was unchanged at $2,021.89 per ounce by 9:33 a.m. ET (1433 GMT). U.S. gold futures also steady at $2,023.20.
“The gold market is just above the $2,000 mark and it seems to be a neutral market. Every time we start to break higher, we come back down,” said Daniel Pavilonis, senior market strategist at RJO Futures.
“There is a lot of uncertainty on what is going to happen here economically in the United States.”
Focus this week will be on the U.S. flash PMI report on Wednesday, fourth-quarter advance GDP estimates due on Thursday and personal consumption expenditures data on Friday.
Fed officials last week said the U.S. central bank needs more inflation data in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter.
Markets are pricing in the U.S. central bank to hold rates unchanged at the end of the policy meeting on Jan. 30-31 and have pared back the timing of the first interest rate cut, according to CME’s FedWatch Tool.
More dovish cues may help shore up bullion above the $2,000 mark but it may break below that level if the prospects of a Fed rate cut in March continue diminishing, said Han Tan, chief market analyst at Exinity Group.
Lower interest rates decrease the opportunity cost of holding bullion.
Meanwhile, the European Central Bank (ECB) meets on Thursday and is expected to hold monetary policy steady.
On the physical front, India increased the import duty on gold and silver findings, used in making jewellery.
Spot silver rose 1% to $22.31 per ounce, platinum climbed 0.4% to $895.63, while palladium lost 0.2% to $934.50.
