Gold’s new year rally fizzles ahead of Fed cues, U.S. data deluge By

By Ambar Warrick 

-- A new year rally in gold prices appeared to have Download the FXTM forex app official websiterun out of steam, with the yellow metal hovering below an eight-month high on Wednesday as markets hunkered down before a slew of Federal Reserve speakers and U.S. economic data due this week. 

While expectations of a less hawkish Fed and a potential recession spurred strong gains in gold over the past two weeks, traders are now awaiting more signals to confirm this trend. Addresses from several Fed officials are due this week, the most notable being on Thursday.

A barrage of U.S. economic readings is also set to shed more light on how the world’s largest economy performed through December, starting with , and data due later on Wednesday. 

was flat at $1,908.74 an ounce, while rose 0.1% to $1,911.30 an ounce by 19:19 ET (00:19 GMT). Both instruments fell 0.5% on Tuesday.

Weakness in the dollar, coupled with growing fears of a recession this year saw gold rally sharply to an over eight-month high last week. The yellow metal is now trading about $160 below a record high, amid growing bets that the Fed will . 

The regained some strength against a basket of currencies this week, recovering from an over seven-month low. But gains in the greenback were limited as markets also awaited a later in the day. 

Any hawkish signals from the central bank could rattle the dollar and provide more support for gold, especially as the tightening of the BOJ’s ultra-loose monetary policy spells more global economic headwinds. 

Other precious metals also kept to tight ranges on Wednesday.

Among industrial metals, copper prices edged lower after rallying sharply on Tuesday amid signs of economic resilience in China, the world’s largest copper importer.

fell 0.2% to $4.2272 a pound, after rallying over 2% in the prior session.

While data on Tuesday showed that slowed substantially in 2022 from the prior year, , particularly in December, drummed up hopes that the country will see an eventual recovery this year after the relaxing of most anti-COVID restrictions.

 

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