In a Market Overview for the February ended on 29th, Kotak Securities cited morning attitude of Gold at Comex as, “Gold steadies near $2045/oz as traders avoid big bets before Core PCE figures which are expected to reiterate that US inflation remained sticky in January!”
Comex Gold prices wavered before the US PCE data and closed marginally lower on February 28, Wednesday, as investors remained cautious. However, some support was rendered amid the drop in yields and dollar after a downward revision in US Q4 GDP. Data showed that US economy expanded an annualized 3.2% in Q4 2023, slightly below 3.3% in the advance estimate, following a 4.9% rate in Q3.
Meanwhile, three Federal Reserve officials said the pace of interest-rate cuts will depend on incoming economic data, suggesting the path to lower borrowing costs may look different than in previous rate-cutting cycles. Boston Fed President Susan Collins and New York’s John Williams said the Fed’s first rate cut will likely be appropriate, later this year, while Atlanta’s Raphael Bostic said he’s currently penciling in a cut for sometime this summer.
The Fed’s preferred PCE price index will be in spotlight for the day. After the release of hotter than expected CPI and PPI for January, Fed’s preferred PCE price inflation is also expected to see an uptick. The core PCE is seen rising 0.4% m/m, the second straight monthly acceleration in a gauge that’s largely been receding over the past two years. Hotter than expected inflation numbers might be a headwind for gold prices.
Comex Silver prices extended declines and closed at a two week low amid weakness in the industrial metals on Chinese demand concerns. Hawkish comments from Fed officials weighed on the bullions, despite a decline in dollar and yields after downward revision in US GDP data for Q3. Risk sentiments might remain limited ahead of the much awaited US PCE price index, which might provide further cues on Fed’s policy path.
While at the evening gold trend observed as commodities trading mixed as dollar wavered ahead of key US data
Comex Gold prices steadied on Thursday as investors geared up for a key US inflation reading that could guide the outlook for interest rates. Meanwhile, dollar depreciated against Yen after BOJ board member Hajime Takata called on the central bank to begin discussing details of a potential end to ultra-loose monetary policy, including an exit from negative interest rates and bond yield control.