Calm cruise underneath

Gold is trying to find balance after two days of declines amid easing tensions in the Middle East. Gold is holding steady ahead of U.S. data due later this week that could shed more light on the Fed’s interest rate path. Bullion traded around $2,300 an ounce after falling nearly 3 percent in the first two sessions of the week as the easing of tensions in the Middle East weighed on safe-haven demand. The market is now turning its focus back to U.S. monetary policy. The Fed’s preferred inflation measure, the personal consumption expenditures index, due on Friday, is expected to show that price pressures remained elevated in March. That would support the argument that there was a delay in rate cuts and that gold will be negatively affected by non-payment of interest. The likelihood that U.S. borrowing costs will fall in June has fallen sharply in the past few weeks and the swap market is currently pricing in just a 16 percent chance. Some investors in the interest rate market are now betting that the Fed will not cut rates at all this year. Gold is still up about 17% since mid-February despite signs that the Fed’s much-anticipated move will be delayed. Instead, rising geopolitical risk, central bank purchases and a sharp increase in buying by Chinese retail investors have supported the move. Spot gold was flat at $2,321.53 an ounce as of 8:53 a.m. Singapore time. The Bloomberg Dollar Spot Index was down 0.1%. Silver, platinum and palladium were relatively steady.