After heavy losses earlier this week, gold edged higher to reclaim the key $2,000 per ounce level as of Friday morning, however, the precious metal remains under selling pressure.
Spot gold (XAU/USD) was trading at $2,004.23 an ounce by 07:20 GMT and was little moved during Asian trade overnight. This comes after bullion prices plunged to $1,983 on Tuesday following higher-than-expected US inflation.
Gold bulls managed to regain the $2,000 level on Thursday after weaker-than-expected retail sales provided some relief from steep losses. However, gold is still poised for a sharp weekly decline as traders scale back expectations for potential rate cuts in 2024.
On the data front, producer price inflation figures are due later today. Even if the PPI print comes in soft, the Fed is unlikely to waiver in its inflation fight.
Atlanta Fed President Bostic said Thursday that inflation will take longer to decline, so it’s premature to predict rate cuts this year. His views aligned with other officials asserting more progress is still required on price stability.
With the central bank adamant on keeping rates elevated as long as economic strength persists, the opportunity cost of holding non-yielding gold is still high. The Fed’s hawkish stance continues to plague bullion.
