Traders expect first Fed rate cut in September
Dollar index
U.S. PCE report due on Friday

April 24 Reuters Gold prices steadied on Wednesday as risk premiums over tensions in the Middle East eased while investors strapped in for U.S. economic data, due later in the week, that could offer clues to the Federal Reserve39;s interest rate path.

Spot gold eased 0.1 to 2,318.50 per ounce by 920 a.m. ET 1320 GMT, after having hit its lowest since April 5 in the previous session. U.S. gold futures fell 0.2 at 2,336.50. Spot silver dipped 0.3 to 27.20.

Bullion prices have fallen over 100 after hitting a record high of 2,431.29 on April 12.

The dollar index firmed 0.2, making greenbackpriced bullion less attractive to overseas buyers.

The gold and silver market is seeing correction with a deescalation in the Middle East conflict. The key question is if these corrections will turn into nearterm price downtrend that would signal market tops are in place, said Jim Wyckoff, senior analyst at Kitco Metals.

Market focus is back on economic reports and the Fed. If we see hot inflation data, then it is going to be harder for Fed to cut rates and gold could drop to below 2,200.

The U.S. gross domestic product GDP data is due on Thursday and the Personal Consumption Expenditures PCE report on Friday.

Traders now expect the first Fed rate cut to come, most likely in September. Higher interest rates reduce the appeal of holding nonyielding gold.

In the long term, gold will rise…