The price of gold rose slightly on Monday as Treasury yields fell, as investors await key U.S. inflation data and comments from Federal Reserve officials during the week for further guidance. new clues on the potential timing of the central bank’s interest rate cut.
Spot gold was up 0.2% at $2,325.53 an ounce by 0333 GMT, after falling more than 1% on Friday. U.S. gold futures rose 0.3% to $2,338.10.
Yields on the 10-year U.S. Treasury fell slightly, making yieldless bullion more attractive to investors.
“Friday night saw heavy selling due to the strength of the US dollar. Gold was hit to some extent, although markets are expecting two rate cuts this year,” said Kyle Rodda, financial markets analyst at Capital.com.
U.S. economic activity hit a 26-month high in June, with a rebound in employment pushing the dollar to its highest level in nearly eight weeks. A stronger dollar makes bullion more expensive for holders of other currencies.
Traders are eagerly awaiting the report on the U.S. Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred measure of inflation, scheduled for Friday, for more guidance on the timing and magnitude of interest rate cuts.
“If the PCE index continues to fall, it could confirm that the Fed is able to cut rates twice this year. And if that’s the case, it will be quite positive for gold,” added M .Rodda.
Lower rates reduce the opportunity cost of holding bullion without yield.
At least five Fed officials will speak this week, including San Francisco Fed President Mary Daly and Fed Governors Lisa Cook and Michelle Bowman.
Spot silver rose 0.2% to $29.59 an ounce, platinum was unchanged at $992.45 and palladium gained 0.5% to $953.46.
