Spot gold was up 0.3% at $2,069.19 per ounce, while U.S. gold futures also advanced 0.3% to $2,078.10 per ounce
Gold prices rose on Tuesday, supported by the prospect of interest rate cuts in 2024 from the Fed, while investors look forward to a number of economic data this week for more clarity on the U.S. rate outlook.
Spot gold was up 0.3% at $2,069.19 per ounce, as of 0350 GMT. U.S. gold futures also advanced 0.3% to $2,078.10 per ounce.
The short-term bullish trend in gold still remains intact above key support level of $2,017 per ounce, said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.
Bullion prices added 13% in 2023 to post their first annual gain since 2020 as hopes the Fed could cut interest rates as early as March lifted demand for the safe-haven asset.
Investors’ attention now shifts to the minutes from the last Fed meeting due on Thursday for more cues on rate cuts this year.
There was a change of tone in December Federal Open Market Committee meeting, so traders will be scrutinizing for much more clarity on this dovish tilt, especially on what the Fed officials are looking out for, Wong added.
Markets are now pricing in an 86% chance of rate cuts from the Federal Reserve in March, shows the CME FedWatch tool. Lower interest rates decrease the opportunity cost of holding non-yielding gold.
Also on the radar, data on U.S. job openings and December non-farm payrolls will also been keenly observed for more clarity on Fed rate path.
On the technical front, spot gold may retest support of $2,062 per ounce, a break below could open the way towards $2,053, as per Reuters technical analyst Wang Tao.
Elsewhere, spot silver gained 0.8% to $23.94 per ounce. Platinum dropped 0.1% to $986.29 and palladium shed 0.1% to $1,097.56.
