Gold struggles for direction ahead of US Fed decision

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Gold prices flitted in a tight range on Tuesday ahead of the U.S. central bank’s verdict on rates and comments from Chair Jerome Powell for clarity on the timing of easing monetary policy, though a weak dollar and lower bond yields lent support.

FUNDAMENTALS

* Spot gold held its ground at $2,030.90 per ounce by 0143 GMT.

* U.S. gold futures rose 0.3% to $2,022.90.

* The dollar index weakened 0.2%, which generally makes gold more attractive to other currency holders. Yields on benchmark U.S. Treasury notes held near a two-week low.

* Markets widely expect the U.S. Fed to stand pat on rates at its two-day policy meeting that starts later in the day, but attention will largely be on comments from Powell on Wednesday.
* Traders are betting on five quarter-point rate cuts for 2024 in the U.S., with the first of those arriving at a coin flip chance in March, according to LSEG’s interest rate probability app IRPR. * A Reuters poll showed on Monday that uncertainty about the economy and U.S. interest rate cuts could drive record gold prices in 2024.

* Lower interest rates decrease the opportunity cost of holding bullion.

* However, analysts and traders have downgraded their price forecasts for platinum and palladium in 2024 as demand struggles to rise significantly, but they still expect prices for both to rebound from current levels.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.14% on Monday from prior session.

* Pandora, the world’s largest jeweller by amount of products sold, has stopped using mined silver and gold and now only manufactures with recycled precious metals, which require less energy to produce.

* Spot silver edged 0.1% lower to $23.17 per ounce, platinum fell 0.2% $924.66, and palladium dropped 0.3% to $980.14.

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