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Gold prices remained relatively stable on Wednesday as traders awaited statements from US Federal Reserve officials, which could shed light on the trajectory of interest rates for the year ahead.
Spot Market Performance
There was minimal movement in spot gold prices, which hovered around $2,033.02 per ounce as of 1030 GMT. Meanwhile, gold futures contracts in the US dipped slightly by 0.1 percent to $2,049 per ounce.
Analyst Insights
Giovanni Stanovo, an analyst at UBS, emphasized the expectation of gold prices to maintain a narrow range in the near term. Stanovo highlighted ongoing strong demand from central banks, with notable purchases from China amounting to ten tons in January alone.
Focus on Fed Comments
Traders are eagerly anticipating remarks from various Federal Reserve officials scheduled to speak throughout the week. Market attention will particularly be on any divergent statements following the release of the latest US economic data.
Interest Rate Expectations
Two Fed officials indicated on Tuesday that if the US economy performs as anticipated, it could pave the way for interest rate cuts. However, concerns regarding inflation persist, signaling that the battle against rising prices is ongoing.
Market Response and Precious Metals
Strong US economic indicators and firm statements from Fed Chair Jerome Powell have tempered expectations for an imminent rate cut in March. Consequently, traders have adjusted their projections, reducing bets on a rate cut in May.
In the broader precious metals market, silver declined by 0.6 percent to $22.26 per ounce, while palladium and platinum also saw decreases, falling by 1.6 percent to $934.99 and 1.1 percent to $894.10, respectively.
