Gold holds tight range as traders await U.S. data for more Fed cues

Gold prices remained steady on Tuesday as investors awaited upcoming U.S. economic data that could provide insight into the Federal Reserve’s monetary policy outlook. The spot gold price was relatively unchanged at $2,024.57 per ounce, while U.S. gold futures held steady at $2,039.80. The market is particularly interested in the Fed’s policy outlook, as expectations for rate cuts next year remain substantial. Last week, Fed Chair Jerome Powell indicated that the era of tightening monetary policy is likely over, citing falling inflation and discussions of borrowing cost cuts. Despite some pushback from Fed officials, investor sentiment has not changed significantly. The market is currently pricing in a 69% chance of a Fed rate cut in March. The lower interest rates associated with rate cuts tend to support non-interest-bearing assets such as gold. Investors are also eagerly anticipating several U.S. economic data releases this week, including the November core personal consumption expenditure index report on Friday, which is the Fed’s preferred measure of underlying inflation. Meanwhile, oil prices are continuing to rise due to attacks by Yemen’s Iran-aligned Houthi militants on ships in the Red Sea, which have disrupted maritime trade and led to reroutes.