The price of gold stabilized during early trading on Wednesday, after a significant decline in the previous session, as statements by a Federal Reserve official (the US central bank) weakened expectations regarding lowering interest rates in March.
Christopher Waller, a member of the US Federal Reserve Board of Governors, said on Tuesday that although the United States is close to the inflation target set by the central bank of two percent, the bank should not rush to reduce the benchmark interest rate until it becomes clear that the decline in inflation will continue.
Traders are waiting to hear more comments from US Central Bank officials this week.
Waller's comments sparked widespread selling, which led to declines in the three major US stock indices. His statements pushed the dollar to its highest level in more than a month and standard US Treasury bond yields to record the largest increase in more than three months yesterday, Tuesday.
A stronger dollar would make bullion more expensive for holders of other currencies, while higher interest rates reduce the appeal of non-yielding gold.
Market expectations for an interest rate cut in March fell to a probability of 62.2 percent, compared to 76.9 percent in the previous session, according to the CME Fed Watch tool.
However, markets are still betting on six interest rate cuts this year, by 25 basis points each time.
Change in prices
The price of gold in spot transactions remained unchanged and remained at $2,027.62 per ounce, by 0236 GMT, after falling 1.3 percent in the previous session, which is the largest one-day decline since December 4.
The price of US gold futures changed slightly to $2,030.90.
In terms of other precious metals, silver, platinum and palladium fell 0.1 percent separately. The price of silver in spot transactions was $22.89 per ounce, platinum was $894.29, and palladium was $937.52.
