By Ashitha Shivaprasad
(Reuters) – Gold prices slipped on Wednesday as the dollar edged up, while market participants assessed the timeline for potential U.S. interest rate cuts and were on the lookout for fresh cues for further clarity on monetary policy.
Spot gold fell 0.3% at $2,307.87 per ounce as of 0757 GMT. U.S. gold futures eased 0.3% at $2,317.20.
The dollar index rose 0.2%, making bullion more expensive for other currency holders. [USD/]
The University of Michigan’s consumer sentiment reading on Friday and comments from a slew of Federal Reserve officials are on investors’ radar this week, while the U.S. consumer price index data is due on May 15.
“The Fed is worried about inflation but isn’t going to hike rates more and still wants to cut if it gets a chance – this is the story. Not much will happen to the story until we get CPI next week,” said Ilya Spivak, head of global macro at Tastylive.
If the upcoming reports show “scary inflation”, then the Fed cannot cut rates and it will pressure gold, Spivak added.
Higher rates reduce the appeal of holding non-yielding bullion.
Minneapolis Fed President Neel Kashkari said on Tuesday that stalled inflation buoyed in part by housing market strength means the U.S. central bank may need to hold rates steady all year.
Markets currently see a 65% chance of the Fed cutting rates in September, as per CME’s FedWatch Tool.
“I would say keep watching China because it is a wild card here,” Spivak said.
China’s central bank added 60,000 troy ounces of bullion to its reserves in April, data showed on Tuesday.
“In the near-term, resistance levels await gold at $2,327 and $2,340, while support is seen at $2,298 on the low side,” said Tim Waterer, chief market analyst at KCM Trade.
Spot silver fell 0.3% to $27.19 per ounce.
Platinum was down 0.7% at $969.44 and palladium lost 0.7% to $964.51.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Sherry Jacob-Phillips, Eileen Soreng, Sohini Goswami and Varun H K)
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