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Gold Steadies near $1,900/oz ahead of Key U.S. Data

* Gold remains vulnerable to deeper pullback - analyst (Recasts, adds comments, updates prices)

May 27 (Reuters) - Gold prices steadied near the $1,900-per-ounce level on Thursday as investors awaited key economic readings out of the United States, while a firmer dollar weighed on bullion prices.

Spot gold was up 0.1% at $1,898.39 per ounce by 0521 GMT, after hitting its highest since Jan. 8 at $1,912.50 on Wednesday.

U.S. gold futures eased 0.2% to $1,900.60 per ounce.

“Gold prices reversed back in parallel with the rebounding U.S. dollar. What this suggests is that we are starting to see markets positioning ahead of Friday’s PCE report,” DailyFX currency strategist Ilya Spivak said, referring to monthly U.S. personal consumption data.

The dollar index rose to a one-week high against rivals, making gold more expensive for other currency holders.

Market participants now await the monthly U.S. personal consumption report on Friday to gauge inflationary pressure. U.S. gross domestic product and jobless claims numbers are due later in the day.

Federal Reserve officials have recently downplayed rising price pressures and affirmed their support to keep monetary policy accommodative for some time.

“Gold remains vulnerable to a deeper pullback as its relative strength index has been overbought for the past few days, which is usually a strong corrective indicator,” OANDA senior market analyst Jeffrey Halley said.

“However, I don’t see gold falling below the $1,875 region ahead of the U.S. data. Gold remains well supported by perceptions that inflation has peaked, and lower U.S. yields.”

On Wednesday, Fed vice chair for supervision Randal Quarles said he was prepared to open talks on reducing the central bank’s emergency support measures, only to also stress the need to remain patient.

Elsewhere, palladium rose 0.4% to $2,755.52 per ounce, silver eased 0.1% to $27.65, and platinum fell 0.3% to $1,187.71.

(Reporting by Brijesh Patel in Bengaluru; editing by Ramakrishnan M. and Subhranshu Sahu)

Source: Reuters


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