Gold prices steady with spotlight on US inflation data

GOLD prices held steady on Monday (Aug 12), with investors awaiting key US inflation data due later this week to gauge the size of the Federal Reserve’s likely interest rate cut next month.

Spot gold were little changed at US$2,425.94 per ounce, as at 0153 GMT. US gold futures slipped 0.3 per cent to US$2,464.80.

The US producer price index is due on Tuesday, followed by the consumer price index on Wednesday.

Currently, the market sees about a 54 per cent chance of a 50 basis point cut in September, according to the CME FedWatch Tool. Non-yielding bullion’s appeal tends to shine in a low-interest-rate environment.

Fed governor Michelle Bowman softened her usually hawkish tone ever so slightly on Saturday, noting some further “welcome” progress on inflation even as she said inflation remains “uncomfortably above” the central bank’s 2 per cent goal.

Physical gold demand in India increased slightly last week due to a price correction, though market volatility led some buyers to delay purchases, while premiums in China rose on safe-haven buying.

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Gold holds ground on US Fed rate-cut hopes, lower yields

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Elsewhere, Palestinian militant group Hamas on Sunday asked mediators to present a plan based upon previous talks instead of engaging in new negotiations for a Gaza ceasefire deal, casting doubt on its participation in a Thursday meeting called by the mediators.

Spot silver fell 0.6 per cent to US$27.29 per ounce, platinum edged 0.1 per cent higher to US$923.20and palladium was nearly unchanged at US$905. REUTERS