- Recessionary fears providing floor for gold prices - analyst
- U.S. PCE data due this week
April 26(Reuters) - Gold prices stuck to a narrow range on Wednesday as traders strapped in for U.S. economic data for further guidance on the Federal Reserve's monetary policy stance.
Spot gold was little changed at $1,995.67 per ounce by 0825 GMT, while U.S. gold futures rose 0.1% to $2,006.70.
Market is focused on the U.S. quarterly gross domestic product data due on Thursday, followed by the reading on the core PCE index on Friday, ahead of the Fed's May 2-3 policy meeting.
All eyes will be on the tone that Fed strikes in the upcoming meeting, said Michael Hewson, chief market analyst at CMC Markets.
"Further weakness in yields should be positive for gold as long as $1,960 holds on the downside, but much will depend on whether the Fed signals a pause when it makes its decision next week."
Traders are mostly expecting the U.S. central bank to raise rates by 25 basis points in the upcoming meeting.
Gold is considered an inflation hedge and safe investment amid economic uncertainties, but rising rates dent the non-yielding bullion's allure.
U.S. consumer confidence dropped to a nine-month low in April as worries about the future mounted, further heightening the risk of a recession later this year.
"Recessionary fears already seem to be providing a floor for gold prices," said Matt Simpson, a senior market analyst at City Index.
Meanwhile, spot silver fell 0.5% to $24.93 per ounce.
A correction in the dollar and a spike in gold prices may attract more safe-haven buying in silver, Hareesh V, commodity research head at Geojit Financial Services, said in a note.
"There are hopes that the industrial demand would grow on hopes of China's growth outlook."
Platinum jumped 1.1% to $1,097.84 and palladium was up 1.7% to $1,509.11.
Reporting by Arundhati Sarkar in Bengaluru; Editing by Sherry Jacob-Phillips
Source: Reuters