Gold prices fell on Monday as investors waited for new US economic data, as reports last week showed inflation stabilizing and boosted hopes that the Federal Reserve will cut interest rates. interest later in the year.
Spot gold was down 0.4% at $2,322.24 an ounce, at 3:20 GMT, after rising more than 1% on Friday. U.S. gold futures fell 0.5% to $2,337.10.
“Today’s small move is probably just a small unwinding of the move we saw on Friday,” said Kyle Rodda, financial markets analyst at Capital.com, adding that in the long term, the fundamentals are very constructive for gold, but they depend on the data.
U.S. retail sales data are due on Tuesday, weekly jobless claims on Thursday and rapid purchasing managers’ indexes on Friday. Several Fed officials are also scheduled to speak this week.
“Signs of weakness are emerging in the US economy, which could weaken the US dollar and increase expectations of rate cuts in the future, gold is in an excellent position to benefit,” added Rodda .
Data released last week showed some weakening in U.S. price pressures, suggesting the labor market was losing momentum, keeping hopes alive for an interest rate cut in September.
According to the CME Group’s FedWatch tool, the probability of a decline in September is 68%, compared to 63% before the release of producer prices on Thursday.
However, Minneapolis Fed President Neel Kashkari said Sunday it was “reasonable to anticipate” the U.S. central bank would cut interest rates once this year, until December.
Lower interest rates reduce the opportunity cost of holding bullion without yield.
In other metals, spot silver was down 1.1% at $29.21 an ounce, platinum was down 0.1% at $957.00 and palladium was flat at $889.93. dollars.
