Singapore, Jan. 10 (BNA): Gold prices were steady on Tuesday, with cautious traders paying close attention to Federal Reserve Chairman Jerome Powell’s speech for insight into the path of the US central bank’s rate hike.
Spot gold settled at $1,872.79 an ounce, as of 0333 GMT. US gold futures settled at $1877.70, according to Reuters reports.
Investors’ focus will be on Powell’s speech at a central bank conference later in the day. Market participants will also scrutinize the US Consumer Price Index (CPI) data due on Thursday for more clues about the Fed’s policy stance.
“Gold prices are hitting key resistance at $1,875… The hawkish tone in Fed Chair Powell’s speech later today could lead to some near-term profit-taking in gold,” said IG Yeap Jun Rong strategist.
“However, the market is on the lookout for a negative surprise in the US CPI to support expectations of a less hawkish interest rate hike, which could translate to an upside for gold prices.”
Higher interest rates reduce the attractiveness of gold as a hedge against inflation and increase the opportunity cost of holding a non-yielding asset.
San Francisco Fed President Mary Daley said Monday that either a 50 basis point or 25 basis point rate hike was a possibility at the next Fed meeting, while Atlanta Fed President Raphael Bostick commented that it was appropriate that we ” More careful” in calibration. rates, with rates likely to remain higher through 2024.
The World Gold Council said the market consensus of a mild recession appears to be taking place, but with a nod to a sharper slowdown that could continue to be positive for gold.
Spot silver lost 0.2% to $23.59, while platinum rose 0.2% to $1,080.91, and palladium increased 0.3% at $1,781.14.