Gold Consolidates in Tight Range as Traders Assess Timing of Interest Rate Cut

On Wednesday, gold prices exhibited a subdued performance as traders weighed the prospective timeline for potential US interest rate cuts and awaited clearer signals on monetary policy.

In spot transactions, gold edged up by 0.1 percent to reach $2,317.44 per ounce by 0444 GMT, while US gold futures recorded a similar gain, climbing by 0.1 percent to $2,326.40 an ounce.

Investor focus remains directed towards forthcoming consumer sentiment data from the University of Michigan, scheduled for release on Friday, along with insights from various Federal Reserve officials. Additionally, the US Consumer Price Index (CPI) data, slated for publication on May 15, is anticipated to provide further clarity on economic conditions.

The allure of gold tends to diminish in environments characterized by high interest rates, as the precious metal does not offer a yield or return on investment.

According to the CME’s Fed Watch tool, market expectations currently lean towards a 65 percent probability of US interest rate cuts occurring in September.

Tuesday’s official data revealed that the Chinese Central Bank augmented its gold reserves by 60,000 ounces in April, marking continued accumulation over the past 18 months.

In the realm of other precious metals, silver observed a modest uptick in spot transactions, rising by 0.3 percent to $27.36 per ounce. Meanwhile, platinum experienced a slight decline of 0.1 percent to $975.48, while palladium registered a 0.4 percent increase, reaching $974.93 per ounce.