Gold locked in a narrow range as traders evaluate rate cut possibilities

Gold prices remained in a limited range on Wednesday, as traders evaluated the possible date for the start of US interest rate cuts and awaited new signs of more clarity on monetary policy.

According to Reuters, gold rose in spot transactions by 0.1% to $2,317.44 per ounce by 0444 GMT. US gold futures gained 0.1% to $2,326.40 an ounce.

Markets are awaiting consumer sentiment data issued by the University of Michigan on Friday and comments from a number of Federal Reserve officials (the US central bank). US CPI data is scheduled for May 15.

“The Fed is concerned about inflation but will not raise interest rates further and still wants to cut them if given the opportunity, that’s the story,” said Ilya Spivak, head of global macro at Tasty Live. “Not much will change until the CPI is released next week.”

Spivak added that if the data shows “scary inflation,” the US central bank will not be able to lower interest rates and this will put pressure on gold.

High interest rates reduce the attractiveness of gold, which does not generate a return.

According to CME’s Fed Watch tool, markets currently expect a 65% cut in US interest rates in September.

Official data showed on Tuesday that the Chinese Central Bank added 60,000 ounces of gold to its reserves in April, continuing its purchases over the past 18 months.

As for other precious metals, silver rose in spot transactions by 0.3% to $27.36 per ounce. Platinum fell 0.1% to $975.48, and palladium rose 0.4% to $974.93.