Gold holds steady as investors eye US data

Gold prices remained largely unchanged on Monday as investors awaited key US economic data releases later this week, Reuters reported.

Recent data suggesting stabilising inflation has boosted hopes for a Federal Reserve interest rate cut in September, potentially benefiting gold.

Spot gold hovered around $2,322.53 per ounce as of 0342 GMT, nearly unchanged from Friday’s close. Despite the flat performance, gold prices gained nearly two per cent in May. US gold futures edged slightly lower by 0.1 per cent to $2,342.70.

The upcoming jobs data will be a crucial short-term catalyst, said Kyle Rodda, a financial market analyst at Capital.com. Any signs of weakness in the labour market, like slowing job growth, could be positive for gold prices, Rodda added.

With the Fed’s policy direction in mind, investors will be closely watching several data releases this week. These include the Institute for Supply Management’s (ISM) national manufacturing PMI on Wednesday, followed by the ADP employment report on the same day and the highly anticipated non-farm payrolls data on Friday.

These reports will provide insights into the US economic health and influence the Fed’s decision on potential rate cuts.

Softer-than-expected inflation numbers, like the recent Personal Consumption Expenditures (PCE) data, have bolstered the case for a Fed rate cut this year, which is currently providing some support for gold, Rodda explained.

However, it’s important to remember that while gold is often seen as a hedge against inflation, rising interest rates can make holding non-interest-bearing assets like gold less attractive.

Meanwhile, other precious metals showed mixed performance. Spot silver dipped 0.8 per cent to $30.12 per ounce, while platinum gained 0.3 per cent to $1,040.80. Palladium, on the other hand, declined 0.5 per cent to $908.19.