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Gold held near three-month lows on Wednesday after strong US economic readings offset bullion’s traditional safe-haven status, while traders positioned for Federal Reserve Chair Jerome Powell’s speech and more data for clues on rate hikes.

Spot gold rose 0.1% to $1,915.22 per ounce by 0346 GMT, hovering close to its lowest level since March 16 at $1,910.

US gold futures were flat at $1,924.10.

“Strong economic data (in the US) strengthened the dollar to send gold back towards its June-low overnight,” said Matt Simpson, senior market analyst at City Index, adding that bullion appeared to be technically driven with bears booking profits.

Data on Tuesday indicating that economy remained on solid footing could lead to more Fed rate hikes to bring down inflation.

Investors expect a 77% chance of a rate hike in July, with rate cuts seen from March 2024 onwards, per CME’s Fedwatch tool, with most major US banks expecting a 25-basis-point rate hike.

High interest rates discourage investing in non-yielding gold.

The Fed will publish minutes of its June 13-14 meeting on July 5, while holding its Federal Open Market Committee (FOMC) on interest rates from July 25-26.

Gold prices continue to decline

Investors will keenly watch Thursday’s personal consumption expenditure (PCE) price index data for May and weekly jobless claims for the week ended June 23.

Gold might not see any big moves after the PCE data unless the CPI rises sharply or falls suddenly, Simpson highlighted, noting that the Fed could maintain a hawkish narrative to tame inflation since it remains well above the central bank’s 2% target.

Powell will speak at a policy panel on Wednesday before the European Central Bank Forum on Central Banking in Sintra along with Bank of England’s Andrew Bailey, European Central Bank’s Christine Lagarde and Bank of Japan’s Kazuo Ueda.

Profits at top gold consumer China’s industrial firms tumbled 18.8% year-on-year in the first five months of 2023, reinforcing market expectations of further policy support over coming months.

Spot silver fell 0.1% to $22.87 per ounce, platinum was down 0.8% while palladium fell nearly 1% to $1,283.06.

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