Gold subdued as investors await further data for Fed rate cues

A worker polishes gold bullion bars in Australia. — AFP

GOLD prices eased on Monday, as investors were cautious ahead of more U.S. economic data release, while reports from last week showed that inflation was stabilising, lifting expectations that the Federal Reserve will likely cut interest rates this year.

Spot gold was down 0.5% at $2,318.79 per ounce, as of 0753 GMT, after rising more than 1% on Friday. U.S. gold futures fell 0.6% to $2,333.50.

"Today's small move is probably just a little bit of an unwind of the move that we saw on Friday," said Kyle Rodda, a financial market analyst at, adding that in the long run, fundamentals are very constructive for gold, but are data-dependent.

The U.S. retail sales data is due on Tuesday, weekly jobless claims on Thursday and flash PMIs on Friday. Several Fed officials are also scheduled to speak this week.

"With some signs of weakness emerging in the U.S. economy, which could weaken the U.S. dollar and also increase expectations of rate cuts going forward, gold is in a great position to take advantage," Rodda added.

Data released last week showed some weakening in price pressures in the U.S., suggesting that the labour market was losing momentum, keeping hopes alive for a September rate cut.

Traders are seeing a 67% probability of a September cut, according to the CME Group's FedWatch Tool, compared to 63% before the producer prices data on Thursday.

However, Minneapolis Fed President Neel Kashkari on Sunday said it's a "reasonable prediction" that the U.S. central bank will cut rates once this year, waiting until December to do it.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

Elsewhere, spot silver fell 1.4% to $29.11 per ounce, platinum was down 0.9% at $949.05 and palladium was little changed at $890.58. - Reuters

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Gold , Federal Reserve , interest rates , inflation


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