“The market is looking ahead to this week’s inflation data for some kind of confirmation that inflation is in check,” Peter Grant, vice-president and senior metals strategist at Zaner Metals, told Reuters. He added that a moderation in the annualised CPI should continue to support gold.
US consumer and producer price data, due on Wednesday and Thursday, respectively, could shape the monetary policy outlook. Weak July jobs data released on Friday prompted markets to scale back bets on a Fed rate increase the following month and sent gold up 2.4%.
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“Gold is still fairly well bid at this point in the wake of last week’s jobs data disappointment, which eroded expectations for a rate hike in September,” Grant added.Traders see about a 50% chance of a rate increase in September and a 79% chance in December, according to the CME FedWatch Tool.
Cleveland Fed President Beth Hammack said on Monday that rates should rise gradually to avoid sharper increases later. Higher interest rates typically reduce the appeal of non-yielding gold.
Meanwhile, US President Donald Trump countered Tehran’s conditions for a peace agreement by demanding compensation for those killed in wars, attacks and protests. Oil prices held near a one-week high.
Among other precious metals, spot silver fell 1% to $65.10 an ounce, platinum dipped 0.1% to $1,750.50 and palladium declined 0.7% to $1,372.75.