Gold steadies as traders await inflation data, US Fed decision

GOLD prices edged higher on Tuesday (Jun 13) after the dollar pulled back, although the moves were muted as traders awaited the US inflation data and the Federal Reserve’s decision on interest rates.

Spot gold was up 0.1 per cent at US$1,959.23 per ounce by 0032 GMT. US gold futures rose 0.2 per cent to US$1,973.40.

The US dollar eased 0.1 per cent, making greenback-priced bullion more appealing to overseas buyers.

The consumer price index for May is expected on Tuesday to show a slowing rise in inflation on a year-over-year basis to 4.1 per cent from the April reading of 4.9 per cent, according to economists polled by Reuters, with a monthly increase of 0.2 per cent, down from a 0.4 per cent rise the prior month.

Markets see a 79.2 per cent chance of the Fed keeping rates unchanged, according to CME’s Fedwatch tool.

Higher interest rates raise the opportunity cost of holding non-yielding gold.

The European Central Bank and the Bank of Japan will deliver their rate decisions on Thursday and Friday, respectively.

However, many bond investors are keeping a defensive stance in managing their portfolios ahead of this week’s Federal Reserve policy meeting, as they brace for the end of the monetary policy tightening cycle this year and possible interest rate cuts sometime in 2024.

Elsewhere in markets, Asian investors are waking up to another upbeat session in global stocks.

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Gold ticks lower on firmer dollar, central bank meetings in focus

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Spot silver rose 0.1 per cent to US$24.0786 per ounce, platinum gained 0.3 per cent to US$992.58, and palladium advanced 0.3 per cent to US$1,353.84. REUTERS