Gold steady ahead of GDP, inflation data

Gold steady ahead of GDP, inflation data

Gold steady early Wednesday, battling a stronger dollar as investors awaited the latest inflation and GDP data for further direction. The dollar index rose 0.3%, its best session since Feb. 13.

U.S. revised fourth-quarter GDP data come out Wednesday, while the Federal Reserve’s favorite inflation measure, the personal consumption expenditures price index, is due out on Thursday with January figures. Both economic reports will be closely watched for signals on how long the central bank will keep interest rates high. The U.S. consumer price index and producer price index came in hotter than expected for January in data released earlier this month. 

Lower Treasury yields provided the yellow metal with some support, though a firmer dollar put gold under some pressure. 

Front-month gold futures rose 0.3% Tuesday to settle at $2,044.10 an ounce on Comex, though the most-active April contract retreated 0.3% in the first two days of the week. Bullion is down 1.1% so far this month after declining 0.2% in January and gaining 0.7% in December. The metal rose 13% in 2023. The April contract is currently down $1.50 (-0.07%) an ounce to $2042.60 and the DG spot price is $2036.30.

In other economic news, U.S. consumer confidence unexpectedly fell in February, according to data released Tuesday by the Conference Board, as concerns over a possible recession grew. The decline follows three months of gains. U.S. durable goods orders also slumped in January, falling by the most in almost four years. Reports on weekly initial jobless claims are due Thursday and ISM manufacturing data Friday. 

A series of Fed officials are scheduled to speak this week and may provide further guidance. They include Atlanta Fed President Raphael Bostic, Boston Fed President Susan Collins and the New York Fed’s John Williams on Wednesday; Chicago Fed President Austan Goolsbee, Bostic and Cleveland Fed President Loretta Mester on Thursday; and Bostic and San Francisco Fed President Mary Daly on Friday. Finance ministers and central bank chiefs from the G-20 countries are also scheduled to meet Wednesday. 

About 97.5% of the investors tracked by the CME FedWatch Tool are betting that the Fed will keep rates unchanged next month, while 2.5% expect a 25 basis point cut. A majority of investors tracked by the tool now also anticipate the Fed will hold rates steady at the following policy meeting in May, too. Most are now looking to June for a rate cut. 

The central bank has raised interest rates by 5.25 percentage points since March 2022 in an effort to cut inflation, but kept rates unchanged at 5.25% to 5.50% earlier this month. High interest rates are typically considered bearish for gold. 

Front-month silver futures, which rolled to May from March last week, edged up 0.1% Tuesday to settle at $22.76 an ounce on Comex, though the May contract is down 1.9% so far this week. Silver is down 1.8% so far this month after falling 3.8% in January and dropping 6.1% in December. It ticked up 0.2% in 2023. The May contract is currently down $0.137 (-0.60%) an ounce to $22.620 and the DG spot price is $22.40.  

Spot palladium lost 0.9% Tuesday to $954.50 an ounce and is down 4.5% so far this week. Palladium is down 4.6% so far this month after tumbling 11% in January and advancing 8.6% in December. Palladium plummeted 38% last year. Currently, the DG spot price is down $28.70 an ounce to $928.50.

Spot platinum rallied 1.9% Tuesday to $899.60 an ounce, though it’s down 1.2% so far this week. Platinum is down 3.4% so far this month after falling 8% in January and rising 8.1% in December. Platinum dropped 6.8% in 2023. The DG spot price is currently down $12.00 an ounce to $886.00.

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