Gold dips after nine-day rally ahead of US inflation data

Gold prices have retreated during today’s trading, but they are still close to record highs as traders await the release of the US headline inflation report, which could provide more clarity on when the US Federal Reserve might start cutting interest rates.

The US Consumer Price Index (CPI) for February, due to be released at 3:30 pm Mecca time, is expected to rise by 0.4% on a monthly basis, while the annual rate of increase is expected to remain steady at 3.1%.

Traders are pricing in three to four (25 basis point) US rate cuts, with a 55.5% chance of the first cut coming at the June meeting, according to the US interest rate tracker available on the Saudi Investing website. Lower interest rates make the non-yielding yellow metal more attractive. The US Treasury Department is also scheduled to sell $39 billion in 10-year notes later today.

Gold and the dollar now

Gold futures are now down 0.32% to $2,181 an ounce. Spot gold is down 0.33% to $2,175 an ounce. This comes after a nine-day rally, with gold hitting a record high of $2,195 on Friday. On the other hand, the US dollar index is flat at 102.450 points.

Other metals

Platinum fell 0.3% in spot trading to $930 an ounce, palladium fell 0.1% to $1,029.38, while silver rose 0.1% to 24.45.

Yen falls as hopes of imminent BOJ shift fade and dollar stabilizes

The yen was on track for its biggest one-day drop against the dollar in a month on Tuesday, as recent comments from Japanese officials have dampened bets on an imminent policy shift by the Bank of Japan (BOJ).

The dollar was broadly steady ahead of key US inflation data later Tuesday that will provide more clarity on the timing of when the Federal Reserve could start a rate-cutting cycle this year. The yen fell 0.4% to 147.47 per dollar in the latest trading, and also fell by a similar amount against the pound sterling.

The yen’s decline came after comments from BOJ Governor Kazuo Ueda, who on Tuesday gave a somewhat less optimistic assessment of the country’s economy than he did in January. Finance Minister Shunichi Suzuki also said separately on Tuesday that Japan has not reached a stage where it can declare that deflation has been defeated.

Sterling Retreats from 8-Month High on UK Wage Slowdown

Sterling fell against a basket of major currencies in European trading on Tuesday, extending losses for a second consecutive day against the US dollar, retreating from an eight-month high as corrective selling and profit-taking continued, and on UK labor market data.

The data showed a larger-than-expected slowdown in average UK wage growth, which reduces inflationary pressure on Bank of England policymakers and increases the likelihood of a cut in UK interest rates in June.

Sterling Price Today

Sterling fell against the dollar by 0.2% to (1.2789$), from an opening price of (1.2814$), and recorded a high today of (1.2824$).

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Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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