By Anjana Anil
(Reuters) – Gold prices pared some losses on Wednesday as bets that the U.S. Federal Reserve will cut rates rose after weaker-than-expected first quarter U.S. growth.
Spot gold was down 0.2% at $3,308.32 an ounce at 1:58 a.m. ET (1758 GMT), but was on track to log its fourth consecutive monthly gain, up almost 6% so far in April. Bullion had fallen over 1% earlier in the session.
U.S. gold futures settled 0.4% lower at $3,319.10.
Data showed U.S. gross domestic product contracted at a 0.3% annualized rate last quarter, as businesses rushed to import goods ahead of expected tariffs from the Trump administration.
“Gold remains confidently in a bull market and today’s data suggests an easier path to initial Fed rate cuts which should be positive for gold,” said Tai Wong, an independent metals trader, adding that gold may trade sideways for a bit given the recent sharp rally to $3,500.
Clearer signs by June of a faltering economy will move the Fed to resume cutting interest rates, ultimately by a full percentage point by the end of the year, traders bet on Wednesday.
Non-yielding bullion, a safeguard against political and financial turmoil, also thrives in a low interest rate environment. It last soared to a record high of $3,500.05 per ounce on April 22.
Meanwhile, the U.S. personal consumption expenditures (PCE) price index was unchanged in March after advancing 0.4% in February. Quarterly PCE excluding the volatile food and energy components surged at a 3.5% rate, an acceleration from the October-December’s 2.6% pace.
“Gold has shrugged off, so far, the lowest read in core PCE since the pandemic due in large part to its sharp rally earlier on the surprise contraction in U.S. GDP,” said Wong.
Traders now await the biggest jobs data this week, the monthly U.S. employment report on Friday, which could shed more light on the Fed’s interest rate outlook.
Elsewhere, China’s markets will be closed from May 1-5 for Labour Day holiday.
Spot silver dipped 1% to $32.64 an ounce, platinum fell 1.2% to $965.30 and palladium rose 0.3% to $937.75.
(Reporting by Anjana Anil in Bengaluru; Editing by Sahal Muhammed)
