BENGALURU: Gold prices were stuck in a narrow $10 trading range on Wednesday as investors held back from making big bets ahead of US economic data this week that could shed more light on the Federal Reserve’s interest rates outlook.
Spot gold was up 0.3% at $1,976.19 per ounce by 1207 GMT, having declined in the previous two sessions. US gold futures gained 0.1% to $1,987.30.
“On one side, the geopolitical tensions and disappointing economic data in Europe drives the safe-haven trade for gold,” said ActivTrades senior analyst Ricardo Evangelista.
“On the other side, strong data out of the US will raise expectations that the Fed will keep rates higher for longer, perhaps even hike again in this year, and this should support the dollar (and) Treasury yields, and it’s bad for gold.”
US business activity ticked higher in October while output in the euro zone took a surprise turn for the worse, surveys showed on Tuesday.
Market focus now shifts to the US third-quarter GDP figures due on Thursday and the US PCE price index on Friday. The dollar index, meanwhile, rose 0.2% against its rivals, making gold more expensive for other currency holders. On the geopolitical front, Israel’s military intensified its bombing of southern Gaza overnight as world leaders called for a halt to fighting to allow aid into the besieged enclave.
“With the Middle East conflict looking like it might not escalate immediately, gold may struggle to break $2,000. Yet, gold bulls may be tempted to buy dips above $1,950,” City Index’s senior analyst Matt Simpson said. Gold is used as a safe investment during times of political and financial uncertainty.
Elsewhere, spot silver fell 0.4% to $22.83 per ounce, platinum gained 0.3% to $886.65 and palladium gained 1.1% to $1,131.89.
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