On Thursday, gold prices stayed below $2,020 per ounce. They were close to the lowest level they reached in a week. Investors were waiting cautiously for important economic information from the US and a decision on monetary policy from the European Central Bank, expected later that day.
Two significant reports are due this week. The US Gross Domestic Product (GDP) report is set for release on Thursday. The following day, Friday, will bring the Personal Consumption Expenditures (PCE) inflation data, which the Federal Reserve prefers to use.
On Wednesday, gold prices faced downward pressure. This happened because the US dollar and Treasury bond yields went up. The rise came after a report showed US business activity in January grew more than people had expected.
Many expect the Federal Reserve to keep interest rates unchanged next week. However, traders are very interested in what Jerome Powell, the Chair of the Federal Reserve, will say. They are looking for any hints about when the Fed might start reducing interest rates.
In other news, the European Central Bank (ECB) is also expected to keep its policy unchanged later on Thursday. Meanwhile, the People’s Bank of China made a surprising announcement on Wednesday evening. It said that next month, it will lower the amount of money banks need to hold in reserve. This move aims to help China’s economy, which is currently facing difficulties.