Dec 27 (Reuters) - Gold prices were flat on Wednesday, as trading remained muted amid expectations of interest rate cuts by the U.S. Federal Reserve in the first quarter of 2024 and a generally weaker dollar.
FUNDAMENTALS
* Spot gold was steady at $2,066.86 per ounce, as of 0150 GMT.
* U.S. gold futures rose 0.4% to $2,078.20 per ounce.
* Bullion is on track to mark an over 10% gain this year - its best since 2020 - on safe-haven inflows driven by wars in Ukraine and the Middle East, coupled with bets for a cut in U.S. interest rates.
* Last week's cooler inflation data boosted financial market expectations for an interest rate cut from the Fed next March, with traders now pricing in about an 80% chance, according to the CME FedWatch tool.
* Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
* The dollar index ticked up by 0.1%, holding near a 5-month low, while it eyed its worst yearly performance since 2020.
* A weaker dollar makes gold more attractive for other currency holders.
* Meanwhile, Australian shares rose to their highest level in 20 months as trade resumed after a long holiday weekend, with Wall Street's strong gains overnight underpinning the market.
* Spot silver rose 0.2% to $24.25 per ounce, while platinum was steady at $978.56. Palladium fell 0.3% to $1,176.49.
* Trading is expected to remain muted for the whole week as many traders are out for holidays globally until the New Year.
DATA/EVENTS (GMT) 1500 US US Richmond Fed Mfg Activity Dec 1530 US US Dallas Fed Svc outlook Dec 1600 Russia Indstrl O/P, Unemp. rate Nov 2300 S. Korea Retail Sales MM Nov 2350 Japan Indstrl O/P, Retail sales Nov (Reporting by Harshit Verma in Bengaluru; Editing by Varun H K)
