• Gold price trades sideways as no Fed policymakers provide a significant timeline for rate cuts.
• Fed Collins sees rate cuts later this year only if price pressures remain consistent with forecasts.
• The US Dollar trades in a tight range ahead of weekly Initial Jobless Claims data.

Gold price (XAU/USD) grinds in a tight range during Thursday’s European session as uncertainty over the timing of interest rate cuts by the Federal Reserve (Fed) deepens. In the monetary policy speeches this week, none of the Fed policymakers have provided any concrete timeline for rate cuts. 

The opportunity cost of holding Gold, a non-yielding asset, rises when the Fed holds interest rates high for a longer period. Fed policymakers are considering rate cuts at this stage as “premature”. The Fed needs more good inflation data to gain confidence that price pressures will sustainably return to the 2% target. Also, inflation pressures could flare up again if the Fed goes aggressively for rate cuts.

The market sentiment is quiet as the United States economic calendar has nothing much to offer. However, next week, the US inflation data for January will be the key trigger that will provide a fresh outlook on interest rates. The Gold price could come under pressure if the inflation data turns out persistently higher than expectations