Gold Prices Hold Steady in Early Trade

3 Jun 2024 , 08:37 AM

As investors awaited additional U.S. economic data to get hints about when the Federal Reserve could begin loosening its monetary policy this year, gold prices remained stable on Monday.

Spot gold remained steady at $2,326.86 an ounce. At $2,347.40, gold futures saw a 0.1% increase.

The Bureau of Economic Analysis of the Commerce Department announced on Friday that the price index for personal consumption expenditures (PCEs) rose by 0.3% in March, which was identical to the unrevised gain in March.

After data suggested that inflation may have moved somewhat closer to the Federal Reserve’s 2% target last month, traders increased their bets that the Fed will announce its first rate cut in September.

Major US retailers slashing prices and fresh statistics indicating a slowdown in consumer spending could encourage the Fed to be more optimistic about declining inflation.

The CME FedWatch Tool indicates that traders are presently pricing in a 54% possibility of a rate drop by September.

Although gold is seen as an inflation hedge, owning non-yielding gold has a greater opportunity cost as interest rates rise.

At 1400 GMT, the Institute of Supply Management’s (ISM) national PMI reading is anticipated in the United States.

Spot silver decreased by 0.1% to $30.36 an ounce, while palladium remained steady at $912.73 and platinum increased by 0.3% to $1,041.20.

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