Gold steadies as traders await US inflation data, Fed speak

The precious metal traded in a tight range on Wednesday, as gains from an overnight rebound were capped by a resilient dollar.

Gold steadies as traders await US inflation data, Fed speak

Asia bids, North America sells - has been the play this week. Month-end flows might also be contributing to the action, but remember, these book balances typically fizzle out quickly as seen yesterday.

Spot gold was hovering around $2,179.62 an ounce by 07:25 GMT, as traders reduced bets ahead of key U.S. economic data and comments from Federal Reserve officials due later today and Friday.

While the yellow metal marked some gains in overnight trade, further upside has been limited by a dominating dollar.

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Market focus is now squarely on the U.S. Personal Consumption Expenditures (PCE) price index data – the Fed's preferred inflation gauge. Traders also await comments from top Fed officials, including Chair Jerome Powell, Christopher Waller, and Mary Daly, for more cues on the trajectory of interest rate hikes.

Despite expectations of rate cuts beginning in June, gold's upside is likely to be limited in the interim period. Atlanta Fed President Raphael Bostic reiterated his forecast for one rate cut this year on Monday, stating the central bank can afford patience as long as the economy holds up.

From a technical perspective, on the 4hr chart, there seems to be a head and shoulders pattern emerging for gold, something to keep an eye on. A close below $2,145 could trigger a move lower, with the first support level seen around $2,080. To the upside, a meaningful break above $2,220 would cement a next leg higher.

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