Gold steady as investors await US data for Fed rate-hike clues

GOLD prices were steady in early Asian hours on Tuesday (Jul 11) as investors maintained a cautious stance ahead of US inflation data that could influence the Federal Reserve’s rate policy trajectory.

Spot gold held its ground at US$1,925.89 per ounce by 0047 GMT. US gold futures were flat at US$1,931.30.

The Fed will likely need to raise interest rates further to bring down inflation that is still too high, but the end to its current monetary policy tightening cycle is getting close, several US central bank officials said on Monday.

Investors see a 94 per cent chance that the central bank would raise rates in its July meeting into the 5.25-5.5 per cent range, keeping them there until rate cuts could be seen well into 2024, as per CME’s Fedwatch tool.

Higher rates dampen the appeal of bullion, which pays no interest.

The focus this week will be on US Consumer Price Index (CPI) data due on Wednesday, with core CPI in June expected to have risen 0.3 per cent month-on-month, as per a Reuters poll.

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An increasing number of countries are repatriating gold reserves as protection against the sort of sanctions imposed by the West on Russia, according to an Invesco survey of central bank and sovereign wealth funds published on Monday.

In other precious metals, spot silver rose 0.1 per cent to US$23.13 per ounce, platinum gained 0.4 per cent to US$929.95, while palladium was up 0.2 per cent at US$1,242.51.

Palladium fell around 4.3 per cent on Monday, and has lost nearly 31 per cent so far this year as the rapid rise of electric vehicles threatens to hammer demand for the autocatalyst metal amid broader economic weakness. REUTERS