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JOHANNESBURG - Gold prices moved in a tight range on Wednesday, with recessionary fears lending some support to the safe-haven asset, while investors sought more clarity on the US Federal Reserve’s rate-hike trajectory from US economic data due this week.
Spot gold held its ground at US$1 997.40 per ounce by 3.07am GMT. US gold futures were up 0.2 per cent at US$2 008.60.
Investors seemed reluctant to offload their gold holdings amid weak US economic data, and ‘trading conditions will remain choppy, and any dips towards US$1 950 could be snapped up’, said Matt Simpson, a senior market analyst at City Index.
Confidence
Data on Tuesday showed US consumer confidence dropped to a ninemonth low in April as worries about the future mounted, further heightening the risk that the economy could fall into recession this year. offer. It will consider shareholder feed- back and present a new proposal. Teck shares jumped as much as 11 per cent in Toronto and traded 5.5 per cent higher
Recessionary fears already seem to be providing a floor for gold prices, and “Friday’s personal consumption expenditures report [is likely to] pack the biggest punch for gold”, Simpson added.
The Dollar index eased, making gold less expensive for overseas buyers. at 11:01am. The vote on Wednesday had turned into a showdown over the future of Teck — Glencore said its proposal would be dead if the spinoff
US quarterly GDP data scheduled for Thursday followed by the reading on the core PCE index on Friday will be closely watched by investors ahead of the Fed’s rate-setting Federal Open Market Committee (FOMC) meeting on May 2-3.
Market participants expect the Fed to hike interest rates by 25 basis points (bps).
Inflation
Though gold is considered a hedge against inflation and economic uncertainty, higher interest rates dim the non-yielding asset’s appeal.
Australian inflation, meanwhile, eased from 33-year highs in the first quarter as the cost of living saw the smallest rise in more than a year, while core inflation dipped below forecasts, suggesting less pressure for another hike in interest rates.
Elsewhere, spot silver fell 0.2 per cent to US$25.00 per ounce, while platinum rose 0.7 per cent to US$1 094.08.
Palladium gained 1.1 per cent to US$1 499.47, on track to snap two sessions of losses, if gains hold.