Gold recovers its losses ahead of US economic data

Gold prices stabilized on Wednesday, recovering from early losses. This coincided with a decline in the dollar from its six-week high and investors awaiting the release of upcoming US economic data.

In spot transactions, gold settled at $2,029.39 per ounce, while US gold futures rose 0.2 percent to $2,030.50. The dollar index fell 0.3 percent from its highest levels since December 13 on Tuesday, making gold more attractive to foreign buyers.

The yield on 10-year US Treasury bonds fell to 4.1050 percent. Investors are closely watching the US Purchasing Managers’ Index reading and upcoming economic data, including fourth-quarter GDP estimates and personal consumption expenditures data.

Traders now expect the Federal Reserve to reduce interest rates five times in 2024 by 25 basis points each time, compared to previous expectations of six reductions two weeks ago. Lowering interest rates reduces the opportunity cost of holding non-yielding gold.

In other precious metals, silver rose by 0.9 percent to $22.62 per ounce, platinum increased by 0.5 percent to $904.58, and palladium rose by 1 percent to $954.77.