Gold subdued on US dollar strength as markets await economic data

GOLD prices edged lower on Tuesday (Aug 1) as the US dollar firmed, while investors looked forward to key economic data this week for signs on how long the interest rates could keep rising to quell sticky inflation.

Spot gold was down 0.1 per cent at US$1,963.04 per ounce by 0116 GMT, while US gold futures dropped 0.4 per cent to US$1,962.90 per ounce.

Gold prices ended July 2.3 per cent higher, the biggest monthly rise in four months on investor expectations that an end to the rate-hiking cycle by global central banks was nearing. Lower rates boost demand for zero-yield bullion.

Chicago Fed president Austan Goolsbee on Monday said the US central bank is “walking the line pretty well” on bringing inflation down without causing a recession, and will watch the data as September approaches to judge if more monetary tightening may be appropriate.

US July jobs report and ISM surveys on manufacturing and services will be scanned this week to assess the impact of higher borrowing costs on the economy.

The US dollar strengthened after a Federal Reserve survey showed US banks reported tighter credit standards and weaker loan demand from both businesses and consumers during the second quarter, evidence that the central bank’s rate-hike campaign is slowing the nation’s financial gears as intended.

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Among other precious metals, spot silver eased 0.3 per cent to US$24.70 an ounce. Platinum was flat at US$948.77, and palladium fell 0.3 per cent to US$1,278.04. REUTERS