Gold prices showed stability on Tuesday, with spot gold remaining flat at $2,018.71 per ounce as of 04:24 GMT. Meanwhile, U.S. gold futures remained almost unchanged, trading at $2,032.30 per ounce.
On Monday, spot gold briefly decreased to $2,011.72 per ounce, reaching a more than two-week low.
In other metals, spot platinum remained steady at $888.89 per ounce. Silver posted a slight gain of 0.1 percent, hitting $22.71 per ounce. Palladium saw a higher jump, reaching $905.71 or a 1.5 percent increase.
Still cautious
Similar to the current trend in the oil market, steady gold prices come as investors are cautious while waiting for the latest U.S. economic data. A new inflation report could shed light on when the Federal Reserve (Fed) might reduce interest rates for the first time.
January’s U.S. Consumer Price Index (CPI) inflation data will be released on Tuesday at 13:30 GMT.
“Trading in gold has been fairly steady today but with a mild downside bias, perhaps because key U.S. economic indicators have tended to beat on the upside in recent months,” shared Tim Waterer. He is the chief market analyst at KCM Trade.
However, Waterer noted that if there is a lower-than-expected CPI, it will weaken the U.S. dollar and bond yields. Subsequently, it could increase gold prices.
Read: Gold prices hold steady as market awaits reports, Fed insights
Predictions
Economists surveyed by Reuters predict the CPI to be at 2.9 percent year-on-year for January. This mirrors a decrease from December’s 3.4 percent. The core CPI could also slow to 3.7 percent, coming from 3.9 percent.
Currently, market participants are also factoring in expectations for the Fed to implement four rate cuts this year, each by 0.25 percentage points. The LSEG’s Interest Rate Probability application suggests a 62 percent likelihood that the initial reduction will occur in May.
In light of these market predictions, Carol Kong, a currency strategist at the Commonwealth Bank of Australia, highlighted the Fed’s cautious stance on adjusting interest rates.
Kong pointed out that Fed rate-setters seek additional proof that inflation is stabilizing around their 2 percent goal before considering any rate reductions.
“Persistently near-target inflation and/or a weakening labor market would give [them] that evidence,” she remarked.
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