Gold prices were little changed on Wednesday after recovering some losses in the previous session, as fading expectations of early US interest rate cuts kept the outlook for bullion uncertain.
The precious metal clawed back some losses after being battered by wagers on higher-for-longer rates, especially following strong US economic data and hawkish rhetoric from the Federal Reserve. While the dollar retreated slightly, a stronger greenback this year has weighed on gold.
Spot gold (XAU/USD) was flat at $2,035.59 per ounce by 07:45 GMT. Prices remain stuck between $2,010 and $2,060 as markets await further economic cues, with next week’s US inflation data expected to provide direction.
Though some predict short-term declines, gold still holds firmly above the $2,000 support level which could soon be tested. However, with bets on March and May rate cuts steadily fading, bullion faces a cloudy outlook. Moreover, easing Israel-Hamas tensions may dampen safe haven demand.
While gold stands to gain from eventual rate cuts, signs suggest the Fed will tighten policy further before easing later this year. Thus the precious metal seems set for an extended period of uncertainty in the near-term.