Gold holds steady as markets await inflation data

Gold stuck in tight range as markets await next week’s inflation data that could shift Fed policy outlook, impacting metal’s direction.

Berto Tordecilla

Berto Tordecilla

Gold remains stuck in a tight trading range failing to capitalise on a softer U.S. dollar and declining bond yields.

Recent upbeat economic data and hawkish Fed rhetoric have quashed hopes for a dovish policy pivot leaving gold struggling to find direction.

On Thursday, the dollar perked up during the New York open after data on unemployment benefits again pointed to a resilient U.S. labor market, which weighed on the yellow metal, but gains were short lived, allowing gold to recover and finish the day unchanged.

Spot gold (XAU/USD) was trading at $2,034.20 by 07:10 GMT on Friday morning.

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Markets are now pricing in rates to continue higher for longer into 2024, limiting gold’s appeal. However, analysts still forecast prices above $2,100 in a year. Steady central bank and geopolitical demand should also lend support.

Next week’s US CPI report could impact the Fed’s policy outlook and give direction on gold’s next move. For now, gold appears poised for range-bound trading in the absence of a defining catalyst.

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