Gold prices held firm as investors awaited more Fed policy cues

(1) Gold prices held firm on Wednesday, with spot gold currently trading near $2,176.45 an ounce, supported by falling U.S. Treasury yields, but as investors remained on the sidelines and waited for more clues on the Federal Reserve’s policy, gold prices traded in a narrow range. (2) U.S. Treasury yields retreated slightly on Tuesday, with strong demand for $67 billion of five-year Treasury bids near the end of the month. (3) Investors are now awaiting the release of the U.S. core personal consumption expenditures (PCE) price index on Friday to gauge when the Federal Reserve may start cutting interest rates. (4) Data on Tuesday showed that U.S. durable goods orders rose more than expected in February, while corporate equipment spending also showed initial signs of recovery. (5) Gold prices hit a record high last week after Federal Reserve policymakers signaled that they still expect a 75 basis point rate cut by the end of 2024 despite recent higher inflation data. (6) Chicago Fed President Goolsbee said on Monday that he expects to cut interest rates three times this year at the Fed’s policy meeting last week. (7) According to CME Group’s FedWatch tool, traders are pricing in a 72% chance that the Fed will start cutting interest rates in June. Lower interest rates reduce the opportunity cost of holding gold. (8) SPDR Gold TrustGLD, the world’s largest gold-backed exchange-traded fund (ETF), said its holdings fell 0.62% to 830.15 tons last day from 835.33 tons on Monday