Gold loses luster on Monday as US data in focus

Gold prices dipped in Asian trading on Monday, surrendering some recent gains, as reported by Investing.com financial platform. Investors turned their focus towards the US dollar, anticipating key inflation data from the US later this week.

The yellow metal enjoyed a brief rally last week fueled by speculation of potential interest rate cuts by the Federal Reserve due to signs of a slowing US economy.

However, gold remains significantly below its record highs set in April and is expected to trade sideways until the release of this week’s inflation data.

Spot gold dipped 0.1 per cent to $2,357.35 an ounce, while gold futures for June delivery fell 0.5 per cent to $2,363.65 by the end of trading day (03:55 GMT).

The Producer Price Index (PPI) data for April arrives on Tuesday, followed by the more influential Consumer Price Index (CPI) data on Wednesday.

Any indication of persistent inflation could further dampen expectations of US interest rate cuts this year, strengthening the dollar and putting downward pressure on metal prices.

The US dollar found some stability after recent fluctuations. While data on Friday revealed a significant drop in US consumer confidence for May, inflation projections remained high for the coming year.

Other precious metals also felt the pressure ahead of the inflation readings. Higher interest rates, if sustained, increase the opportunity cost of investing in metals, making them less attractive.

Platinum futures held steady at $1,005.05 an ounce, while silver futures dropped 0.8 per cent to $28.288 an ounce.

Among industrial metals, copper prices advanced on Monday, hovering near two-year highs due to some optimism about tighter markets. However, mixed signals from China, the world’s top copper importer, limited further gains.

Three-month copper futures on the London Metal Exchange rose 0.3 per cent to $10,080.50 a ton, while one-month copper futures edged up 0.2 per cent to $4.6630 a pound.

Chinese inflation data released over the weekend indicated a rise in CPI inflation. However, PPI inflation, a key indicator of local factory and business activity, shrank for the 19th consecutive month.