Gold in a tight range as traders await indications of Fed rate cut

Gold prices stuck in a relatively tight range on Wednesday, as traders’ focus turns to statements from US Federal Reserve officials issued during the week, which may provide more indications on the path of interest rates this year.

According to Reuters, there was no significant change in the price of gold in spot transactions, which recorded $2,033.02 per ounce by 1030 GMT. Gold in US futures contracts fell 0.1% to $2,049 an ounce.

“I expect prices to remain within a limited range in the short term,” said Giovanni Stanovo, an analyst at UBS. “Gold is likely to receive support from continued strong demand from central banks, with China alone purchasing another ten tons in January.”

He added, “The market will closely follow the statements of members of the Federal Open Market Committee today to obtain any indication of different statements after the release of the latest American economic data.”

Investors are awaiting comments from a group of Federal Reserve officials who are scheduled to speak this week. Focus is likely to shift later to next week’s inflation report for further indications on the timing of interest rate cuts.

Two Fed officials said on Tuesday that if the US economy performs as expected, that could open the door to lower interest rates. But the battle against inflation is “not over yet.”

Strong US economic data and tougher statements from Council Chairman Jerome Powell dashed hopes for a cut in interest rates in March, and prompted traders to reduce their bets on a cut in US interest rates in May.

As for other precious metals, silver fell 0.6% to $22.26 per ounce, palladium fell 1.6% to $934.99, and platinum fell 1.1% to $894.10.