Gold firms as traders position for US data

March 25 (Reuters) – Gold prices firmed on Monday as investors positioned for key economic data and comments from Federal Reserve officials this week for further clues on the timing of interest rate cuts signalled by the U.S. central bank.

Spot gold was up 0.5% at $2,175.21 per ounce, as of 1306 GMT, while silver rose 0.5% to $24.78.

U.S. gold futures climbed 0.8% to $2,177.00.

The weekly initial jobless claims print due on Thursday, followed by the U.S. core personal consumption expenditure (PCE) price index data on Friday.

The PCE data is the Fed’s preferred inflation gauge and any market reaction to it will be seen only next week on account of the Good Friday holiday.

“Higher-than-expected PCE figures may prompt spot gold to pare some of its month-to-date gains,” said Han Tan, chief market analyst at Exinity Group.

Tan said elevated gold prices reflected expectations that Fed rate cuts were just around the corner.

“Furthermore, as Fed Chair Powell himself stated last week, a sudden and unexpected deterioration in the US jobs market may jolt the Fed into a more aggressive policy easing cycle, which in turn would be a boon for gold bugs.”

Gold prices hit record peaks last week after Powell said the U.S. central bank is still likely to reduce rates by three-quarters of a percentage point by the end of 2024.

A slew of Fed officials are expected to speak this week.

Traders are pricing in a 73% probability of a June rate cut, according to the CME FedWatch Tool, opens new tab, up from 60% before the Fed’s March policy meet held last week.

Among autocatalysts, platinum gained 1.8% to $909.70 and palladium climbed 3.6% to $1,020.45.

Demand for palladium from the auto industry will be supported for longer after last week’s new U.S. emissions law changes, which will effectively allow for more catalysed car sales in coming years, analysts at Heraeus said in a note.