Gold has recently reached record price levels (Shutterstock)

Gold prices remained locked in a narrow range - today, Tuesday - as investors' focus shifted to US inflation data scheduled for release later this week, which may shed more light on the timing of the first rate cut by the US central bank this year.

gold prices

Gold prices in US spot contracts rose 0.7% to $2,186.65 per ounce, at the time of writing the report, and futures contracts for May delivery rose 0.43% to $2,196.30 per ounce.

For his part, Kyle Rodda, a financial markets analyst at Capital.com, said: “We lack new catalysts, but at the present time the market seems to be consolidating and catching its breath after a fairly strong rally.”

He added: “The next step will likely depend on the release of the (US) personal consumption expenditures index this week. Any evidence of a continued slowdown in inflation in the United States, which would allay fears of accelerating prices or at least stabilize them at a high level, would have Good effect for gold.”

Gold prices reached a record level last week after policymakers at the Federal Reserve (the US central bank) indicated that they still expect to cut interest rates by 3 quarters of a percentage point by the end of 2024 despite the recent high inflation readings.

Demand for gold increases with the expectation of a rate cut (Shutterstock)

3 discounts

Chicago Federal Reserve Bank President Austin Goolsbee said yesterday, Monday, that he proposed during the US central bank’s monetary policy meeting last week three rate cuts for this year.

Meanwhile, Federal Reserve Board of Governors member Lisa Cook warned that the US central bank needs to proceed cautiously when deciding when to start cutting interest rates.

Investors are now looking forward to the US Core Personal Consumption Expenditure Price Index data scheduled for release on Friday, and the index is expected to rise 0.3% in February, which will maintain the annual rate at 2.8%.

Traders expect a 70% probability that the US central bank will start cutting interest rates next June, according to the CME Group's Fed Watch service.

A lower interest would reduce the opportunity cost of holding bullion.

The dollar index fell 0.38% against a basket of major currencies, which makes buying gold less expensive for holders of other currencies.

As for other precious metals, silver rose in spot transactions 0.4% at $24.78 per ounce, platinum rose 0.55% to $907.45, and palladium also increased 0.25% to $1,009.14.

Source: Reuters + websites