By Seher Dareen
(Reuters) – Gold edged down on Thursday following strong fourth-quarter U.S. economic data, but indications of a likely slowdown limited losses in the safe-haven asset.
Spot gold fell 0.5% to $1,936.81 per ounce by 9:41 a.m. ET (1441 GMT), having dropped as much as $1,930.99 earlier. The yellow metal also hit its highest since April 2022 at $1,949.09 earlier in the session.
U.S. gold futures were down 0.3% to $1,937.60.
The U.S. economy maintained a strong pace of growth in the fourth quarter as consumers boosted spending on goods, but momentum appears to have slowed considerably towards the end of the year, with higher interest rates eroding demand.
The dollar index held most gains following the data but its reaction was relatively muted, and it was still in proximity of an eight-month low. [USD/]
“While gold is still somewhat pressured by the fact that the data has given the Fed room to be higher for longer, on the other hand, concerns about a slowdown, especially with recent headlines on layoffs, are limiting the downside,” said Tai Wong, a senior trader at Heraeus Precious Metals in New York.
“This is giving bulls the momentum backed by strong technical moves in the past couple of months.”
Initial jobless claims also fell more than expected, signalling a tight labour market.
The data likely sets the tone heading into the Fed’s policy-setting committee’s two-day meeting next week.
Markets have priced in a 25-basis-point (bps) interest rate hike, a step down from the 50 bps and 75 bps increases seen last year.
The core personal consumer expenditure numbers on Friday ahead of the meetings next week will be playing on the minds of bulls as well as bears, said independent analyst Ross Norman.
Lower rates tend to be beneficial for bullion, decreasing the opportunity cost of holding the non-yielding asset.
Silver rose 0.2% to $23.94 per ounce, platinum dropped 1.4% to $1,025.13 while palladium was down 0.9% to $1,683.10.
(Reporting by Seher Dareen and Arundhati Sarkar in Bengaluru; Editing by Vinay Dwivedi)
