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Gold stalls as investors eye key US data for direction

Gold prices remain stuck in a narrow range as investors await key economic data from the US for clues on the metal’s future direction. The precious metal has been confined to a $2,000-$2,050 per ounce …

Gold prices remain stuck in a narrow range as investors await key economic data from the US for clues on the metal’s future direction. The precious metal has been confined to a $2,000-$2,050 per ounce range since January, with potential gains capped by expectations of sustained US interest rate hikes.

Recent comments from Federal Reserve officials suggesting a continued hawkish stance to combat inflation have further strengthened the dollar and put pressure on gold prices. This reinforces the notion that the Fed is in no hurry to loosen policy due to sticky inflation, keeping the dollar near three-month highs. Spot gold (XAU/USD) was trading at $2,034.78 per ounce as of 7:15 GMT.

Investors are now looking towards key US data releases to determine the next leg of movement for gold markets. The PCE price index, the Fed’s preferred inflation gauge, is due this Thursday and is expected to show inflation remaining elevated, giving the Fed little reason to consider rate cuts.

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Before that, a second reading on fourth-quarter GDP data is expected to show mild cooling in the US economy, but not enough to sway the Fed towards loosening policy. This prospect of higher-for-langer rates bodes poorly for non-yielding assets like gold, as it increases the opportunity cost of holding the metal compared to interest-bearing investments.

Adding to the mix are today’s releases of US Durable Goods Orders and CB Consumer Confidence data. These indicators, alongside the upcoming GDP and inflation figures, will paint a clearer picture of the US economic landscape and, consequently, the future path of interest rates, ultimately influencing gold prices.

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