Gold edges lower from nine-month high, focus turns to U.S. data

Gold stalls after nine-month high as focus turns to U.S. data By Reuters

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Economy 1 hour ago (Jan 25, 2023 10:27AM ET)

(C) Reuters. FILE PHOTO: Gold bullion is displayed at GoldSilver Central’s office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo

By Seher Dareen

(Reuters) – Gold edged lower on Wednesday as investors took advantage of a recent surge in prices to lock in some profits ahead of a slew of U.S. economic data that could influence the Federal Reserve monetary policy meeting next week.

Spot gold fell 0.4% to $1,930.42 per ounce by 10:04 a.m. ET (1504 GMT). U.S. gold futures were also down 0.2% to $1,931.70.

Some corrective price action and profit-taking from traders are the reason for the slight pullback in gold, which “could be argued as being healthy for the uptrend to be extended,” said Jim Wyckoff, senior analyst at Kitco Metals.

Gold prices rose to a nine-month high on Tuesday as fears over global recession and hopes around slower rate hikes from the U.S. central bank boosted its allure.

The U.S. Commerce Department is expected to unveil its initial advance fourth-quarter GDP estimates on Thursday, which could set the tone for the Fed’s Jan. 31-Feb. 1 policy meeting.

U.S. weekly initial jobless claims, new home sales, and durable goods orders are also on investors’ radar tomorrow.

Meanwhile, traders expect the Fed to scale back its rate hike pace further to a quarter-basis-point after slowing its policy tightening spree last month.

Lower interest rates tend to be beneficial for bullion, decreasing the opportunity cost of holding the non-yielding asset.

“Gold’s great run was sparked by a change in sentiment in how quickly the Fed will pause its rate hikes and further fuelled by the collapse of crypto exchange FTX and a weakening of the U.S. dollar,” said Rupert Rowling, market Analyst at Kinesis Money in a note.

“With these three factors now priced in, gold will need a fresh catalyst to push it higher than the elevated level it is already trading at.”

Elsewhere, spot silver rose 0.4% to $23.75 per ounce, platinum dropped 1.3% to $1,043.13 while palladium was down 1.4% to $1,719.50.

Gold stalls after nine-month high as focus turns to U.S. data

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