1 kg of gold bullion on Friday, December 22, 2023, at the YLG Bullion International headquarters in Bangkok, Thailand.
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Gold prices are taking a breather from Monday's record rally, with traders awaiting U.S. inflation reports for fresh clues on when to cut interest rates, but buoyed by a cooling U.S. labor market and Federal Reserve comments. I was given a boost.
As of 0602 GMT, spot gold was flat at $2,177.24 an ounce. US gold futures fell 0.1% to $2,183.90.
Gold hit an all-time high of $2,194.99 on Friday for the fourth consecutive day on data suggesting a cooling US labor market.
Matt Simpson, senior analyst at City Index, said: “Gold is clearly in demand, with major speculators increasing their net long exposure last Tuesday at the fastest weekly pace in three-and-a-half years. “This is not a market where you can short sell for any length of time while expecting the Fed to cut interest rates.” He said.
Gold speculators on the COMEX increased their net long positions by 63,018 contracts to 131,060 contracts in the week ending March 5, according to Friday's data.
Simpson said it is likely to be the biggest driver of gold prices this week, given that the Fed is currently in a blackout period, and that the February consumer price index (CPI) will be released on Tuesday. ) statistics, prices will simply consolidate at higher levels. He said.
If the CPI numbers remain stable, this could provide grounds for an early interest rate cut and support gold prices. Fed Chairman Jerome Powell, in Congressional testimony last week, expressed more confidence in lowering rates in the coming months.
Traders are currently pricing in three to four quarter-point (25bps) rate cuts in the US, with a 75% chance of the first rate cut in June, according to the LSEG interest rate probability app.
Lower rates make non-yielding bullion more attractive.
Spot platinum rose 0.1% to $913.16 an ounce, while palladium was steady at $1,019.54 and silver was little changed at $24.30.