Gold prices held steady on Wednesday, as investors refused to make big bets ahead of a key U.S. inflation print that could offer more clarity on when the Federal Reserve might begin cutting interest rates.
FUNDAMENTALS
* Spot gold rose 0.1% to $2,031.30 per ounce, as of 0151 GMT, trading in a range of about $4.
* U.S. gold futures rose 0.2% to $2,036.90 per ounce. * Bullion prices stood ground even as the dollar index ticked up and yields on 10-year U.S. Treasury notes remained above 4%. [USD/]
* Traders are on lookout for Thursday’s U.S. consumer price inflation report that is expected to show headline inflation rose 0.2% in the month and by 3.2% on an annual basis.,
* An official U.S. report revealed that consumers expect a decline in inflation while Fed Governor Michelle Bowman stated that the U.S. central bank’s monetary policy seems “sufficiently restrictive”.
* Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
* Market participants are pricing in an about 62% chance of a rate cut by the U.S. central bank in March, according to the CME FedWatch tool.
* Australia’s inflation slowed to a near two-year low in November and core inflation also eased sharply, a softer-than-expected result that reinforced market expectations that interest rates would not need to rise any further.
* Australian shares fell, dragged down by mining and gold stocks, while Japan’s benchmark Nikkei average opened up 0.4% higher. [.AX] [.T]
* Spot silver was steady at $22.96 per ounce, while platinum rose 0.2% to $931.75, and palladium gained 0.5% to $983.39.