Gold prices edge up as investors eye inflation data

Gold prices inched higher on Tuesday, defying the pull of potential interest rate cuts as investors awaited key inflation reports this week, Reuters reported.

The data is expected to influence the pace and size of Federal Reserve rate reductions planned for later this year.

Spot gold rose 0.4 per cent to $2,344.39 per ounce by 05:57 GMT, following a one per cent dip on Monday.

Analysts believe a strong showing above $2,320 could signal bullish momentum, potentially pushing gold towards its all-time high if inflation data weakens.

However, some experts caution that current prices might be inflated by ongoing stagflation fears, which could overlook the increased cost of holding gold due to rising interest rates.

This week’s US producer and consumer price index reports will be crucial in determining the Fed’s approach to interest rates.

Recent weak jobs data has fueled expectations of rate cuts, with a majority of economists predicting two reductions starting in September.

Meanwhile, other precious metals saw modest gains, with silver rising 0.8 per cent to $28.41 per ounce, platinum edging up 0.6 per cent, and palladium increasing 0.8 per cent to $968.43.

BHP Group is also expected to make a sweetened cash-and-stock offer for Anglo American after its initial bid was rejected.