By Seher Dareen
(Reuters) – Gold steadied on Wednesday as investors took advantage of a recent surge in prices to lock in profits ahead of a slew of U.S. economic data that could influence the Federal Reserve monetary policy meeting next week.
Spot gold was little changed at $1,936.79 per ounce by 12:07 p.m. ET (1707 GMT). U.S. gold futures rose 0.1% to $1,938.00.
Some corrective price action and profit-taking from traders are the reasons for the slight pullback in gold, which “could be argued as being healthy for the uptrend to be extended,” said Jim Wyckoff, senior analyst at Kitco Metals.
Gold prices rose to a nine-month high on Tuesday as fears over global recession and hopes around slower rate hikes from the U.S. central bank boosted its allure.
The dollar was 0.1% lower, making gold more attractive to holders of foreign currencies and limiting the yellow metal.
The U.S. Commerce Department is expected to unveil its initial advance fourth-quarter GDP estimates on Thursday, which could set the tone for the Fed’s Jan. 31-Feb. 1 policy meeting.
U.S. weekly initial jobless claims, new home sales and durable goods orders are also on investors’ radar tomorrow.
Traders see the policy rate peaking at 4.91% in June, even as Fed policymakers have repeatedly backed taking rates above the 5% level.
Lower interest rates tend to be beneficial for bullion, decreasing the opportunity cost of holding the non-yielding asset.
“Gold’s run was sparked by a change in sentiment in how quickly the Fed will pause its rate hikes,” along with the weakening in crypto exchange FTX and the U.S. dollar,” said Rupert Rowling, market Analyst at Kinesis Money in a note.
“Gold will need a fresh catalyst to push it higher than the elevated level it is already trading at.”
Elsewhere, spot silver rose 0.4% to $23.77 per ounce, platinum dropped 1.6% to $1,040.25 while palladium sank 2.6% to $1,697.33.
(Reporting by Seher Dareen in Bengaluru; Editing by Elaine Hardcastle and Krishna Chandra Eluri)
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