Gold declines for second session after US data

Gold prices fell in European trade for a second session off nine-month highs on profit-taking while dollar regained ground. 

Dollar rebounded from recent lows after strong US data that bolstered the case for multiple Fed rate hikes this year. 

Now investors await important US data on consumer spending later today to gauge the pace of policy tightening this year.

Gold Prices Today

Gold prices fell 0.45% to $1,919 an ounce, after losing 0.9% yesterday on profit-taking away from nine-month highs at $1,949. 

The Dollar

The dollar index rose 0.2% on Friday for the second session off eight-month lows at 101.50 against a basket of major rivals.

Recent data showed US economy grew in the fourth quarter more than expected, while unemployment claims hit nine-month lows.

Spending Data

Investors await important US consumer spending data for December, important for gauging inflation and the pace of policy tightening this year by the Fed.

Strong data will bolster the case for an extended policy tightening and multiple more rates hikes this year, in turn pressuring gold prices. 

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 919.37 tones, the highest since October 31. 

Would Gold Prices Pierce $2,000 in 2023?

Many analysts expect gold prices to extend gains beyond $2,000 for the first time since March 2022 amid active expectations the Fed will end the cycle of rate hikes in the first half of the year.