* U.S. personal consumption expenditure (PCE) data due at
1330 GMT
* Dollar near 6-week high
Jan 26 (Reuters) – Gold prices were set for their second
consecutive weekly fall on the face of a resilient U.S. economy
that kept the dollar near multi-week highs, while the focus
shifted to a key inflation print due later in the day.
Spot gold was little changed at $2,021.28 per ounce
by 0415 GMT. U.S. gold futures rose 0.2% to $2,021.20.
Both have lost 0.4% so far this week.
The U.S. economy is still resilient and that is capping gold
strength, along with the fact that expectations for the first
rate cut have been pushed further down the calendar this year,
said Kelvin Wong, a senior market analyst for Asia Pacific at
OANDA.
The U.S. economy grew faster than expected in the fourth
quarter as inflationary pressures subsided amid strong consumer
spending, official data showed, echoing indications that the
economy kicked off 2024 on a strong note, according to an S&P
Global report earlier this week.
Bullion, however, trimmed its weekly losses by gaining 0.4%
on Thursday, as treasury yields dropped on abating
inflationary pressures.
The dollar index rose 0.2% for the week, hovering
near a six-week high, making bullion less attractive to other
currency holders.
Markets widely expect the U.S. Fed to stand pat on rates at
its policy meeting on Jan. 30-31, but attention will largely be
on comments from Chair Jerome Powell.
Traders have deferred their first rate cut expectation and
are now pricing in a 93% chance for a May cut, according to
LSEG’s interest rate probability app IRPR.
Focus now shifts to the Fed’s favourite inflation gauge –
the personal consumption expenditure (PCE) data – due at 1330
GMT.
Lower interest rates decrease the opportunity cost of
holding bullion.
Spot silver fell 0.2% to $22.87 per ounce, platinum
was steady at $891.90, and palladium dropped 0.5%
to $935.89.
(Reporting by Harshit Verma in Bengaluru; Editing by Sherry
Jacob-Phillips and Janane Venkatraman)
