Jan 24, 2024: In Asian trade on Wednesday, gold prices experienced a slight decline, maintaining a trading range established over the past week as uncertainties surrounding U.S. interest rate cuts in 2024 increased.
Meanwhile, copper prices, among industrial metals, edged lower after earlier in the week witnessing substantial gains fueled by optimism about China.
Gold had faced a challenging start to 2024, dropping to as low as $2,000 an ounce earlier in the month as traders gradually discounted expectations of an interest rate cut by the Federal Reserve in March 2024. However, the precious metal rebounded on the back of safe-haven demand, especially amid escalating geopolitical tensions in the Middle East. This rebound led to gold establishing a trading range between $2,000 and approximately $2,050 an ounce over the past week.
In the current scenario, spot gold declined by 0.3% to $2,023.92 an ounce, while gold futures expiring in February saw a 0.1% decrease to $2,024.65 an ounce by 00:17 ET (05:17 GMT). The strength of the U.S. dollar, which traded near six-week highs on Wednesday, also exerted downward pressure on gold prices.
The focus in metal markets now shifts to potential cues regarding when the Federal Reserve might initiate interest rate cuts in 2024. The upcoming release of fourth-quarter gross domestic product data on Thursday is anticipated to indicate a slowdown in U.S. economic growth. Additionally, the PCE price index data, scheduled for Friday, is expected to reiterate that inflation remained elevated in December, serving as key indicators for market participants awaiting the next steps from the Fed.