Gold prices edged lower on Thursday after the U.S. Federal Reserve projected just one interest rate reduction this year, dashing investors' hopes of two cuts, while a cooler-than-expected inflation report limited the dip.
Spot gold was down 0.2% at $2,317.38 per ounce, as of 1053 GMT. U.S. gold futures fell 0.9% to $2,333.10.
The market is still digesting a quite intense Wednesday, that saw U.S. inflation data supporting gold, while Fed's hawkish strike kept prices in check, Kinesis Money market analyst Carlo Alberto De Casa said.
The Fed held rates steady and projected only one rate cut in 2024 despite some progress in inflation, as growth and unemployment lodged at levels better than the U.S. central bank considers sustainable in the long run.
Meanwhile, inflation data showed the consumer price index was surprisingly flat in May, sending gold as high as 1% before it pared gains to close just about 0.3% higher on Wednesday.
The Fed is unlikely to take action until either a more convincing decline in price pressures is seen or the unemployment rate jumps.
Last week, gold prices saw their biggest sell-off since November 2020, after a double-whammy from strong U.S. jobs report and news of China's central bank holding off gold purchases.
"Despite this, gold remains above $2,300/Oz, which means that buyers are still actively seeing corrections and dips as a good opportunity for increasing their gold holdings," said De Casa.
Gold's rally to successive record highs shows every sign of continuing in the second half of 2024, as the fundamental case for bullion remains firmly in place, though $3,000 per ounce looks just out of reach, traders and industry experts said.
Elsewhere, spot silver fell 1.4% to $29.28 per ounce, platinum was down 1.6% at $948.25 and palladium lost 1.3% to $894.97.
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