Gold retreats in anticipation of US economic data

Gold prices maintained a downtrend today, Feb. 26, with investors awaiting this week the release of January readings for the US GDP and the personal consumption expenditures (PCE) index — a key gauge for the Federal Reserve — to reassess their expectations about the future of interest rates.

Bullion for April delivery plunged by 0.26% to $2,044 per ounce at 10:50 am Makkah time, while spot prices stabilized at $2,034.55 an ounce.

Elsewhere, silver futures for March delivery shed 0.60% to $22.84 per ounce, with platinum spot prices also down 0.60% to $896.53 an ounce.

“If solid US macro data continues to create hesitation from the Fed regarding when to cut rates, this could create further headwinds for gold as investors may chase yield elsewhere,” Chief Market Analyst at KCM Trade Tim Waterer said, Reuters reported.

Market participants’ focus is now shifting to the Fed’s preferred inflation indicator, or PCE, data, which is due on Feb. 29, with estimates suggesting a 0.4% rise in January from 0.2% in December 2023. This will follow the release of the US GDP final reading for Q4 2023 amid expectations of a 3.3% hike in line with the preliminary reading.