Gold slips as investors await US inflation data

Bengaluru — Gold prices eased on Tuesday, while investors looked towards key US inflation data due later this week that could throw some light on the Federal Reserve’s interest rate cut stance.

Spot gold was down 0.2% at $2,327.52/oz by 3.39am GMT. US gold futures fell 0.2% to $2,339.90.

“Technical factors in the short-term are not so positive for gold. After last Friday’s sell-off, short-term traders view this as a bearish signal explaining the lacklustre movement for gold holding on to these levels,” said Kelvin Wong, a senior market analyst for Asia-Pacific at Oanda.

Bullion dropped more than 1% on Friday as the dollar jumped after US business activity crept up to a 26-month high in June amid a rebound in employment.

First-quarter US GDP estimates are due on Thursday and the personal the consumption expenditures (PCE) price index report on Friday.

If the actual number for the core PCE comes in strong, it would potentially not be rosy news driver for gold and could actually see gold break below the $2,300 level, Wong said.

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

San Francisco Fed Bank president Mary Daly on Monday said she did not believe the US central bank should cut rates before policymakers were confident that inflation was headed towards 2% but also noted that rising unemployment was increasingly a risk.

Other Fed officials speaking this week include Fed governors Lisa Cook and Michelle Bowman along with Richmond Fed president Tom Barkin.

Elsewhere, spot silver fell 0.5% to $29.47/oz, platinum rose 0.5% to $999.70.

Palladium gained 1.5% to $993.83 after hitting a one-month high on Friday.

Reuters