Gold steady as investors wait for more data for direction

Bengaluru — Gold prices were little changed on Monday as traders awaited more US economic data this week, after recent data showed that inflation stabilised and lifted the hope for the Federal Reserve to cut interest rates later in 2024.

Spot gold was nearly unchanged at $2,322.53/oz by 3.42am GMT. Bullion was up nearly 2% in May. US gold futures fell 0.1% to $2,342.70.

“The short-term catalyst is going to be the jobs data and if it shows a little bit of slack building in the labour market, you know that's going be good for gold prices,” said Kyle Rodda, a financial market analyst at Capital.com.

Investors will look at the Institute of Supply Management’s (ISM) nationwide purchasing managers index (PMI) reading expected at 2pm GMT, Wednesday’s ADP employment report and nonfarm payrolls data due on Friday to gauge the US economy’s health and if it will deter the Fed from cutting rates in September.

“Gold is getting a little bit of support after the marginally softer than expected personal consumption expenditures (PCE) numbers supported the notion that the Fed can cut rates this year,” Rodda said.

Data on Friday showed that the US inflation had stabilised in April, raising bets for a rate cut in September. Traders are pricing in about a 54% chance of a cut in September, versus about 49% before the report.

While bullion is considered an inflation hedge, higher rates increase the opportunity cost of holding the non-yielding asset.

Spot gold may break support at $2,319/oz, and fall towards $2,302, according to Reuters technical analyst Wang Tao.

Spot silver fell 0.8% to $30.12/oz, platinum was up 0.3% at $1,040.80 and palladium lost 0.5% to $908.19.

Reuters