Gold prices in Asian trade remained steady, staying within a recently-established range due to increasing belief that the Federal Reserve will not cut interest rates in the early part of 2024. The price of gold was set to add about 0.7% for the week after significant losses in the prior two weeks. The market also priced out the chance of a May rate cut, while the chance of a hold in June increased. This prospect of higher interest rates presents more pressure on gold prices, given that the higher rates push up the cost of buying bullion. However, gold fared better than its precious metal peers this week.
Amidst signals that markets are pricing out early rate cuts by the Federal Reserve, gold prices have remained largely unchanged. The recovery in gold prices this week did little to offset the steep losses experienced in the preceding two weeks. Concerns over higher interest rates continued to limit significant growth in gold prices. The inherent unpredictability of gold prices is illustrated by its steadiness within a specific trading range, thus making it difficult to anticipate forthcoming price movements. While gold prices continue to remain flat, there was hope among industrial metals with copper set for weekly gains on the back of optimistic outlook concerning China’s economic recovery. Official data offered some positive signs, with spending and travel increasing during the Lunar New Year holiday.
