Gold holds steady, PCE data in focus

Gold prices edged lower yesterday before quickly recovering, as investors awaited key inflation data that could influence future interest rate decisions.

The yellow metal is currently trading within a narrow range of around $2,036 per ounce, as market participants brace for the release of the Core PCE Price Index later today.

This data point, closely watched by the Federal Reserve, is expected to confirm persistent inflation in the United States, potentially dampening hopes of an early rate cut in 2024.

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Recent comments from Fed officials, including John Williams and Raphael Bostic, emphasising the need for continued efforts to combat inflation, have already cast doubt on such expectations.

While markets currently price in a 52.6% chance of a rate cut by June, the possibility of the Fed holding rates steady is also gaining traction, potentially impacting the dollar and, consequently, gold prices.