Gold prices steadied above the $4,200 threshold on Wednesday morning, with the market pausing after recent gains as investors looked ahead to a series of US economic releases that could influence the Federal Reserve’s next policy move.

Gold futures climbed 0.4% to $4,236.90 per ounce, while spot gold retreated 0.3% to $4,206.49 an ounce at the time of writing.

“I think buyers remain keen on gold given the interest rate outlook, but they are perhaps waiting for more evidence of economic softening which may give a further signal to the Fed that a rate cut this month may be warranted,” said KCM Trade chief market analyst Tim Waterer.

According to the CME’s FedWatch tool, US rate futures are pricing in an 88% probability of a rate cut next week, up from 85% a week earlier. Lower interest rates typically bolster demand for non-yielding assets such as gold.

Oil prices rose on Wednesday, reversing early declines, as traders judged that Russia-Ukraine peace talks were unlikely to result in the removal of sanctions on Russian crude. Gains were tempered, however, by persistent concerns about a global supply surplus.

Brent (BZ=F) crude futures rose 0.5% to $62.77 per barrel at the time of writing, while West Texas Intermediate (CL=F) (WTI) futures climbed 0.6% to $58.97 a barrel.

Signs of rising US inventories added to the bearish tone. According to market sources citing American Petroleum Institute data, US crude stocks increased by 2.48 million barrels in the week to 28 November. Gasoline inventories rose by 3.14 million barrels, while distillates were up 2.88 million barrels.

The US Energy Information Administration is due to release official stockpile data later on Wednesday.

Source: ukfinanceyahoo