Gold prices saw a slight increase on Wednesday, finding support from lower U.S. Treasury yields while facing pressure from a stronger dollar. The market awaits crucial economic indicators and statements from Federal Reserve officials to assess the likelihood of future interest rate cuts.
Spot gold saw a 0.04 percent increase, recording $2,031.25 per ounce as of 6:41 GMT. Meanwhile, U.S. gold futures fell 0.23 percent to $2,039.45 per ounce.
In Saudi Arabia, 24-carat gold recorded SAR244.632 per gram while 22-carat gold recorded SAR224.235 per gram.
Benchmark 10-year U.S. Treasury yields slipped to 4.286 percent from 4.3150 percent on Tuesday, while the dollar index rose 0.15 percent.
Federal Reserve’s stance
Federal Reserve officials reiterated the central bank’s cautious approach towards monetary policy adjustments, citing concerns over potential inflationary pressures. The market anticipates further insights into the Fed’s future policy trajectory throughout the week and its impact on gold prices.
Traders continued to assess the probability of future rate cuts, with expectations hovering around 79 basis points for 2024. According to LSEG’s interest rate probability app, there is a 63 percent chance of a 25 basis points rate cut occurring in June. Lower interest rate expectations typically enhance the attractiveness of holding gold, thus supporting its prices.
U.S. economic data
In addition, U.S. economic data on Tuesday revealed that U.S. durable goods orders posted the largest drop in nearly four years in January. U.S. consumer confidence also declined in February. Therefore, markets now await the core personal consumption expenditures (PCE) price index on Thursday, which reveals insights into the inflation rate’s trajectory and its impact on gold prices.
Read: Oil prices slip amid U.S. rate cut concerns, stockpile surge
Other precious metals
While gold prices remained relatively stable, spot platinum experienced a slight decline of 0.1 percent to $887.20 per ounce. Palladium dropped 0.5 percent to $931.57 per ounce. Silver, on the other hand, recorded a modest gain of 0.1 percent, reaching $22.45 per ounce. The performance of these precious metals reflected the broader dynamics within the commodities market.
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