#Gold range-bound as market focuses on US economic data (21 Dec 2023)

Posted by Clara Mellor on 03:12 with No comments

KEY POINTS:

  • U.S. 10-year bond yields at near 5-month low
  • U.S. weekly jobless claims data due at 1330 GMT
  • U.S. core PCE data due on Friday

Gold prices crept higher on Thursday, but traded in a relatively tight range as investors looked to U.S. economic data for further clarity on the Federal Reserve's next monetary move.

Spot gold GOLD was up 0.2% at $2,033.98 per ounce, as of 1035 GMT, trading in a narrow $9 range in the session so far. U.S. gold futures GOLD fell 0.1% to $2,045.70.



If US data this week reinforces the view that the Fed will soon start cutting rates, then gold will gain but in the case of stronger data then the Fed is likely to keep rates higher for longer.

"We will see the unwinding of the restrictive monetary policies of the major central banks, so 2024 will be a positive year for gold."

Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

Benchmark U.S. 10-year bond yields US10Y were near a five-month month low touched on Wednesday, while the dollar index DXY held steady.

Data on Wednesday showed U.S. existing home sales rose unexpectedly in November, while consumer confidence increased more than expected in December amid optimism about the labour market.

Investors are now looking ahead to the U.S. third-quarter GDP report and weekly jobless claims data due later on Thursday, and the core personal consumption expenditure (PCE) report due on Friday.

A dovish tilt from the U.S. central bank has prompted traders to price in several rate cuts in 2024. However, some Fed officials have pushed back against the idea of rapid rate cuts.

The market expects an 80% chance of Fed rate cut by March, according to the CME FedWatch tool.

Among other metals, spot silver XAGUSD1! gained 0.3% to $24.20 per ounce, while platinum PL1! edged down 0.2% to $955.23 and palladium XPDUSD1! fell 0.3% to $1,192.34.


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