NEW YORK: Gold prices steadied after briefly losing ground on Tuesday as unexpectedly flat US retail sales data raised hopes of interest rate cuts by the Federal Reserve, while investors waited for key jobs and inflation data for more clues.
Spot gold was up 0.1 percent to USD5,058.86 per ounce by 09:38 a.m. ET (1438 GMT), after falling as low as USD4,985.99 earlier in the session.
US gold futures for April delivery rose 0.1 percent to USD5,084.10 per ounce.
“We’re seeing a consolidation ahead of a bevy of key economic data coming out later this week,” said David Meger, director of metals trading at High Ridge Futures.
January’s nonfarm payroll data is due on Wednesday, with economists expecting 70,000 jobs to have been added last month, according to a Reuters poll. January’s Consumer Price Index (CPI) is due on Friday.
US retail sales were unexpectedly unchanged in December, putting consumer spending and the overall economy on a slower growth path heading into the new year.
A softer economic outlook has strengthened expectations of lower interest rates, with traders pricing in two 25-basis-point rate cuts this year. Lower rates typically support non-yielding bullion by reducing the opportunity cost of holding the metal.
Meger said the “weakness in the US dollar will likely continue to underpin prices,” noting that geopolitical tensions and expectations for lower interest rates still provide support for gold, alongside the psychological USD5,000 level.
Meanwhile, White House economic adviser Kevin Hassett said on Monday that US job gains could be lower in the coming months due to slower labor force growth and higher productivity.
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