Gold prices edged higher on Monday as U.S. Treasury yields fell, as investors await inflation data due later in the week that could influence the Federal Reserve’s interest rate path .
Spot gold was up 0.4% at $2,330.56 an ounce by 0834 GMT, after falling 1% on Friday due to a stronger dollar. U.S. gold futures rose 0.5% to $2,343.30.
Yields on the 10-year U.S. Treasury fell slightly, making non-yielding bullion more attractive to investors.
“The focus remains on upcoming U.S. economic data and whether that data confirms a soft landing, allowing the Fed to cut interest rates,” said Giovanni Staunovo, an analyst at UBS.
“We continue to believe gold is supported and we are targeting a price of $2,600 per ounce at the end of the year.
Data on personal consumption expenditures (PCE), the Fed’s preferred measure of inflation, is due Friday. During this week, at least five Fed officials will speak, including San Francisco Fed President Mary Daly and Fed Governors Lisa Cook and Michelle Bowman.
According to the CME’s FedWatch tool, traders currently estimate a 66% chance of a Fed rate cut in September.
Lower rates reduce the opportunity cost of holding bullion.
Data on Friday showed that U.S. business activity rose to a 26-month high in June, but price pressures eased significantly.
On the geopolitical front, eight Palestinians were killed Sunday in an Israeli airstrike on a training center near Gaza City used to distribute aid.
Among other precious metals, spot silver rose 0.5% to $29.68 an ounce and platinum gained 0.6% to $998.35.
Palladium gained 4.6% to $992.53. In the previous session, prices hit a one-month high and briefly surpassed the key $1,000 per troy ounce level in volatile trading as some investors covered their short positions and the market was tense for physical supply nearby.
