Recasts, adds comment and updates prices
By Deep Kaushik Vakil
March 30 (Reuters) – Gold prices pared earlier gains on Thursday as higher bond yields dulled bullion’s shine, limiting the upside from a weaker dollar as investors waited for U.S. inflation data to gauge the Federal Reserve’s next move.
Spot gold was up 0.2% at $1,967.17 per ounce by 10:02 a.m. EDT (14:02 GMT), having touched a session high of $1,975.29 earlier. U.S. gold futures were broadly unchanged at $1,967.00.
The key driver is the downward move in the U.S. dollar index, combined with “markets expecting a somewhat early Federal Reserve pivot to a more dovish stance,” said Bart Melek, head of commodity strategies at TD Securities.
The dollar index .DXY eased 0.5%, making gold more attractive for overseas buyers. USD/
Data showed U.S. gross domestic product rose by 2.6% in the fourth quarter. The Fed’s favored inflation gauge, core personal consumption expenditures (PCE), is due on Friday.
Investors will be looking for clues about the path of the U.S. central bank’s monetary policy. According to the CME FedWatch tool, markets are pricing in about a 50-50 chance of the Fed maintaining rates at current levels at its May meeting.
“Anything below expectations on the core (PCE) would imply that there is less need or requirement for tight monetary policy from the Federal Reserve,” Melek added.
Wall Street’s main equity indexes opened higher while benchmark 10-year Treasury yields edged up, as fears of a banking crisis eased but investors remained cautious about the impact bank failures would have on the economy. .N US/ MKTS/GLOB
“We expect the gold price to fall to around $1,900 per troy ounce – previously $1,800 per troy ounce – in the coming months,” Commerzbank wrote in a note.
Spot silver rose 0.8% to $23.53 per ounce, platinum added 1.2% to $978.88 and palladium gained 2.9% to $1,481.47.
Reporting by Deep Vakil in Bengaluru; Editing by Kirsten Donovan
