Gold Range-Bound as Market Focuses on US Economic Data

GOLD - LONDON. Gold prices crept higher on Thursday, but traded in a relatively tight range as investors looked to U.S. economic data for further clarity on the Federal Reserve's next monetary move.

Spot gold was up 0.2% at $2,033.98 per ounce, as of 1035 GMT, trading in a narrow $9 range in the session so far. U.S. gold futures fell 0.1% to $2,045.70.

If US data this week reinforces the view that the Fed will soon start cutting rates, then gold will gain but in the case of stronger data then the Fed is likely to keep rates higher for longer, said Ricardo Evangelista, senior analyst at ActivTrades.

"We will see the unwinding of the restrictive monetary policies of the major central banks, so 2024 will be a positive year for gold."

Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

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Benchmark U.S. 10-year bond yields were near a five-month month low touched on Wednesday, while the dollar index held steady.

Data on Wednesday showed U.S. existing home sales rose unexpectedly in November, while consumer confidence increased more than expected in December amid optimism about the labour market.

Investors are now looking ahead to the U.S. third-quarter GDP report and weekly jobless claims data due later on Thursday, and the core personal consumption expenditure (PCE) report due on Friday.

A dovish tilt from the U.S. central bank has prompted traders to price in several rate cuts in 2024. However, some Fed officials have pushed back against the idea of rapid rate cuts. The market expects an 80% chance of Fed rate cut by March, according to the CME FedWatch tool.

Among other metals, spot silver gained 0.3% to $24.20 per ounce, while platinum edged down 0.2% to $955.23 and palladium fell 0.3% to $1,192.34.