Gold stuck in a range as traders seek direction from US data

Investors seemed reluctant to offload their gold holdings amid weak U.S. economic data.

“Trading conditions will remain choppy, and any dips towards $1,950 could be snapped up,” said Matt Simpson, a senior market analyst at City Index.

Recessionary fears already seem to be providing a floor for gold prices, and Friday’s personal consumption expenditures report will likely “pack the biggest punch for gold,” Simpson added.

Data on Tuesday showed U.S. consumer confidence dropped to a nine-month low in April as worries about the future mounted, further heightening the risk that the economy could fall into recession this year.

The dollar index inched 0.3% lower, making gold less expensive for overseas buyers.

Investors will closely watch U.S. quarterly gross domestic product data scheduled for Thursday, followed by the reading on the core PCE index on Friday, ahead of the Fed’s May 2-3 meet.

Market participants widely expect the Fed to hike interest rates by 25 basis points.

Although gold is considered a hedge against inflation and economic uncertainty, higher interest rates dim the non-yielding asset’s appeal.

Australian inflation, meanwhile, eased from 33-year highs in the first quarter as the cost of living saw the smallest rise in more than a year, while core inflation dipped below forecasts, suggesting less pressure for another hike in interest rates.

Elsewhere, spot silver was flat at $25.05 per ounce, while platinum rose 0.9% to $1,096.21.

Palladium climbed 2.2% to $1,516.28, set to break a two-day losing streak if gains hold.