January’s Narrow Range Continues To Hold

Gold is slightly weaker in the Asia-Pac session, after closing 0.4% higher at $2029.28 on Tuesday.

• Bullion has traded in a relatively narrow range this month as investors seek further clues on whether the Federal Reserve will start reducing interest rates as soon as March. Lower interest rates are typically positive for non-interest-bearing gold.
• The market is currently assigning less than a 50% chance to a 25bp rate cut in March. This compares to the near 70% chance seen a week ago.
• Fed speakers are in blackout ahead of next week’s FOMC meeting.
• US data scheduled for later in the week include the latest GDP figures and core PCE index, which is the central bank’s preferred gauge of underlying inflation and will likely drive sentiment for the precious metal in the short term.