Gold Markets gold holds tight range ahead of U.S. economic data


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Gold prices fell on Wednesday after a nine-month high in the previous session as the dollar stabilized and investors took positions ahead of US fourth-quarter economic growth data.

Spot gold last fell 0.47% to $1,926.30 an ounce after hitting its highest since late April on Tuesday. US gold futures fell 0.5% to $1,926.30.

The U.S. Commerce Department is expected to release its first preliminary GDP estimates for the fourth quarter on Thursday, which could set the tone for the Federal Reserve’s Feb. 31. 1 policy meeting.

Gold’s losses after peaking on Tuesday were the result of a technical correction as investors closed positions to lock in gains ahead of the data release, said ActivTrades senior analyst Ricardo Evangelista.

“Overall sentiment is positive, with the Fed expected to take a more favorable stance and announce a 25 bps rate hike when it meets next week. If confirmed, the scenario will be negative for the US dollar and government bonds, providing support to gold. “

Lower interest rates tend to favor bullion, lowering the opportunity cost of holding the non-performing asset.

The dollar index, meanwhile, rose 0.2% against its rivals, making gold more expensive for other currency holders.

Traders expect the Fed to further scale back the pace of rate hikes after slowing its policy tightening to 50 basis points (bp) last month after four consecutive 75 bps hikes. Fears of a possible recession also supported gold, analysts said.

US business activity contracted for the seventh consecutive month in January, although the downturn moderated in both manufacturing and services for the first time since September.

Among other precious metals, spot silver fell 1% to $23.43 an ounce, platinum fell 1.75% to $1,038.51 and palladium lost 0.77% to $1,729.70.

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