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Bengaluru — Gold prices jumped more than 1% on Thursday on short-covering after dipping to the lowest in a month earlier in the session, while the market awaited key US data for further cues on the US Federal Reserve’s policy trajectory.
Spot gold gained 0.8% to $2,607.88/oz as of 2.51am GMT. However, US gold futures eased 1.2% to $2,620.60/oz.
“Very short-term orientated speculators are looking for opportunities to buy the dips and gold’s gain is because of short-covering after the metal touched the psychological level of $2,600 yesterday,” said Kelvin Wong, Oanda’s senior market analyst for Asia Pacific.
“If the US personal consumption expenditures (PCE) data comes in line with expectations, that shouldn’t be a big surprise. But in case it inches up to 3% and above, we could see some pressure on gold again.”
Traders are now watching out for key US GDP, initial jobless claims data later in the day and core PCE data later this week for further insights into the Fed’s 2025 rate cut path.
Bullion declined more than 2% to its lowest since November 18 after the US Fed lowered rates by 25 basis points as expected but indicated it would make fewer rate cuts by the end of 2025.
Fed chair Jerome Powell said that the central bank’s policymakers wanted to see more progress in bringing inflation down as they considered the path of future rate cuts, as inflation had exceeded year-end projections.
Markets now expect the Fed to leave its benchmark overnight rate unchanged at the January 28-29 meeting.
Higher rates reduce the appeal of holding the nonyielding asset.
Spot silver was up 0.3% to $29.44 /oz, platinum added 0.6% to $924.65/oz and palladium gained 1% to $912.70/oz.
Reuters
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