April 26 (Reuters) – Gold prices moved in a tight range on Wednesday, with recessionary fears lending some support to the safe-haven asset, while investors sought more clarity on the Federal Reserve’s rate-hike trajectory from US economic data due this week.
Spot gold was steady at USD 1,996.99 per ounce by 0541 GMT, trading in a USD 9 range, while US gold futures rose 0.1% to USD 2,006.90.
Investors seemed reluctant to offload their gold holdings amid weak US economic data, and “trading conditions will remain choppy, and any dips towards USD 1,950 could be snapped up,” said Matt Simpson, a senior market analyst at City Index.
Data on Tuesday showed US consumer confidence dropped to a nine-month low in April as worries about the future mounted, further heightening the risk that the economy could fall into recession this year.
Recessionary fears already seem to be providing a floor for gold prices, and “Friday’s personal consumption expenditures report will likely pack the biggest punch for gold,” Simpson added.
The dollar index eased, making gold less expensive for overseas buyers.
Investors will closely watch US quarterly gross domestic product data scheduled for Thursday, followed by the reading on the core PCE index on Friday, ahead of the Fed’s rate-setting Federal Open Market Committee meeting on May 2-3.
Market participants expect the Fed to hike interest rates by 25 basis points.
Although gold is considered a hedge against inflation and economic uncertainty, higher interest rates dim the non-yielding asset’s appeal.
Australian inflation, meanwhile, eased from 33-year highs in the first quarter as the cost of living saw the smallest rise in more than a year, while core inflation dipped below forecasts, suggesting less pressure for another hike in interest rates.
Elsewhere, spot silver fell 0.1% to USD 25.03 per ounce and platinum jumped nearly 1% to USD 1,096.83.
Palladium was up 1.1% to USD 1,499.30, on track to snap two session of losses, if gains hold.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Sherry Jacob-Phillips and Varun H K)
This article originally appeared on reuters.com