Gold prices remained steady on Thursday after dropping to a two-week low in the previous session. This was due to the strong performance of the dollar and Treasury yields ahead of an important inflation report expected later in the week.
Spot gold prices stayed unchanged at $2,298.88 per ounce, while U.S. gold futures saw a 0.2% decrease at $2,309.60. The dollar’s strength, near a two-month high, made gold more expensive for holders of other currencies. Additionally, benchmark 10-year yields also rose slightly.
Traders are eagerly awaiting the U.S. first-quarter gross domestic product estimates and the personal consumption expenditures (PCE) price index report to gain insights on potential rate cuts this year. Sales of new U.S. single-family homes declined to a six-month low in May, indicating a slowdown in the housing market recovery.
Federal Reserve officials continue to discuss the possibility of rate cuts, with Governor Michelle Bowman stating her belief that inflation will decrease further with steady policy rates. Lower interest rates could make holding non-yielding bullion more attractive.
Spot gold prices are expected to continue falling within the range of $2,275-$2,286 per ounce. In other news, European Central Bank policymakers mentioned the possibility of gradually reducing interest rates if inflation declines as predicted.
Spot silver rose slightly to $28.78 per ounce, platinum increased to $1,011.65, and palladium dropped to $922.94.
Upcoming data/events include the EU Consumer Confidence Final report, U.S. Durable Goods report for May, U.S. GDP Final for Q1, and Weekly Initial Jobless Claims.
(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Janane Venkatraman)