Gold prices edged higher on Wednesday as investors looked forward to minutes from the Federal Reserve’s latest policy meeting and U.S. jobs data for more clarity on the central bank’s interest rate outlook.
Spot gold was up 0.3% at $2,064.39 per ounce, as of 0253 GMT. U.S. gold futures were flat at $2,072.50 per ounce.
“Gold is in consolidation mode at the moment, really building on those 2023 gains with potentially more to come should the current expectations for a dovish Fed in 2024 hold,” said Tim Waterer, chief market analyst, KCM Trade.
Traders have doubled down on bets for interest rate cuts in 2024, encouraged by slowing inflation and a dovish tilt by the Fed at its December policy meeting.
Those rate-cut expectations helped gold to post a 13% jump in 2023, its first annual gain since 2020. Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
Gold prices fall, silver’s unchanged
Focus now shifts to the minutes of the U.S. central bank’s December policy meeting to be released at 1900 GMT. Futures markets see a 70% chance of a 25-basis-point rate cut at the March 20 meeting, according to CME’s FedWatch Tool.
Investors are keenly awaiting a slew of U.S. economic data this week, including non-farm payrolls report on Friday that may influence whether the Fed begins to cut rates in March as markets expect.
“There is certainly a chance we could see gold going to $2,100 per ounce in the near term, if we don’t getting up stream of upside surprises in the macro gauges,” Waterer said.
Investors are also keeping a close watch on tensions in the Middle East after Israel killed Hamas deputy leader Saleh al-Arouri in a drone strike in Lebanon’s capital Beirut on Tuesday.
Spot silver gained 0.2% to $23.68 per ounce, while platinum was flat at $982.11. Palladium rose 0.3% to $1,084.37.
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