Gold prices remain flat in early trade

8 May 2023 , 09:12 AM

After falling more than 2% the previous day, gold prices were unchanged on Monday as investors remained cautious ahead of important U.S. inflation data, expected this week.

Spot gold was unchanged at $2,016.29 per ounce. At $2,023.80, U.S. gold futures were down 0.1%.

The consumer price index (CPI) numbers for the United States are coming on Wednesday.

On Friday, the price of gold dropped more than 2% as better-than-expected U.S. payroll data dampened Federal Reserve interest rate lowering expectations.

Data released on Friday indicated that the U.S. labour market continued to be strong as job growth surged in April and salary rises picked up significantly.

On Sunday, U.S. Treasury Secretary Janet Yellen issued a dire warning that if Congress did not act to raise the debt ceiling, it might result in a ‘constitutional crisis’.

Traders will also monitor news on the American financial industry.

Rising rates and economic instability increase the demand for gold with no yield.

According to the World Gold Council (WGC), the first three months of 2023 saw a decline in global gold demand as big purchases by central banks and Chinese consumers were countered by lower investor demand.

Physical gold dealers in a significant trade hub in China gave discounts last week as high costs discouraged consumers from making large purchases. Meanwhile, demand in India was severely hampered by a record increase in local prices.

Spot silver remained at $25.64 per ounce, platinum fell to $1,058.48, and palladium increased to $1,505.80, all unchanged from the previous day.

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