Gold inches up as investors eye inflation data

Gold prices edged higher on Monday, recovering from Friday’s losses, as Treasury yields fell. Investors are closely watching upcoming US inflation data and Federal Reserve officials’ comments for hints on possible interest rate cuts.

Spot gold rose 0.2 per cent to $2,324.25 per ounce by 0541 GMT, following a drop of more than one per cent on Friday. US gold futures also gained slightly, up 0.2 per cent to $2,336.60.

Lower 10-year US Treasury yields boosted interest in non-yielding  assets.

Financial analyst Kyle Rodda noted that a recent sell-off was driven by a strong dollar, but gold markets are still anticipating potential rate cuts from the Fed.

US business activity climbed to a 26-month high in June, fuelled by a rebound in employment. This pushed the US dollar to its highest level in nearly eight weeks, making gold more expensive for holders of other currencies.

Investor attention is now on Friday’s release of the US core Personal Consumption Expenditures (PCE) price index, the Fed’s preferred measure of inflation. This data point will be crucial in determining the timing and magnitude of potential rate cuts.

Meanwhile, spot silver rose 0.3 per cent to $29.61 per ounce, platinum remained flat at $991.95, and palladium edged up 0.8 per cent to $956.59.