Singapore, January 18 (BNA): Gold prices fell slightly on Wednesday as the US dollar held steady, while expectations of a slower pace of Fed rate hikes limited losses.
Spot gold was down 0.3% at $1,902.79 an ounce as of 0256 GMT. US gold futures fell 0.2% to $1,906.00, according to Reuters.
The dollar index rose 0.3%. A strong dollar tends to make gold more expensive for buyers who hold other currencies.
“Gold will bounce around the $1,900 level in the near term. I don’t think we will see any big moves and it will remain stuck in a neutral zone,” said Edward Meir, metals analyst at Marex.
“The focus of the market will be on economic data. If the narrative continues that inflation is coming down and interest rates are going to go down, then gold will be bullish.”
Investors will be watching the US Producer Price Index (PPI) and retail sales data due later today.
The US central bank raised interest rates by 75 basis points four times in the past year, before slowing to 50 basis points in December. Traders are mostly pricing in a 25 basis point rally at the next Federal Reserve policy meeting.
Lower interest rates tend to be beneficial to bullion, which reduces the opportunity cost of holding non-yielding assets.
Richmond Fed President Tom Barkin said Tuesday that the stopping point for the Fed’s rate hike will depend on the path of inflation.
On the physical front, Canadian miner Barrick Gold Corp (ABX.TO) on Tuesday reported a sequential 13.4 percent increase in gold production in what could be its highest quarterly production last year.
Spot silver fell 0.1% to $23.90 an ounce, platinum lost 0.6% to $1033.06, and palladium fell 0.2% to $1740.30.