* US CPI data due on Thursday
* Fed’s Powell: “more good data” will “strengthen” case for rate cut
July 9 (Reuters) – Gold prices were little changed on Tuesday as the dollar held firm and Treasury yields ticked higher, while investors looked forward to the U.S. June inflation data due later this week for more clarity on the U.S. interest rate path.
Spot gold was up 0.1% to $2,360.70 per ounce as of 10:13 a.m. ET (1413 GMT), after dropping more than 1% in the previous session. U.S. gold futures firmed 0.2% to $2,367.80.
Dollar Strength and Rate Cut Expectations
The dollar was up 0.1% against its rivals, making gold more expensive for other currency holders, while Benchmark 10-year Treasury yields inched higher. There’s an expectation that the Federal Reserve is more likely to start cutting rates as early as September, which is contributing positively to the current market condition, said Bart Melek, head of commodity strategies at TD Securities.
Recent U.S. economic data pointed to a slackening labor market, cementing expectations that the U.S. central bank is on course to start cutting interest rates soon.
Federal Reserve’s Stance on Rate Cuts
However, Fed Chair Jerome Powell on Tuesday in congressional testimony said inflation “remains above” the Fed 2% target, but has been improving in recent months and “more good data would strengthen” the case for central bank interest rate cuts.
Insight: The Federal Reserve’s comments on inflation and the potential for rate cuts are closely monitored by investors as they assess the future direction of gold prices and the broader economy.
Focus on Consumer Price Index (CPI) Data
Focus now shifts to the consumer price index (CPI) data on Thursday, with recent numbers showing a cooling from unexpectedly high levels at the start of the year. If markets are shown evidence of still-stubborn U.S. inflation, that may prompt the precious metal to unwind more of its recent gains, said Han Tan, chief market analyst at Exinity Group.
Market Expectations and Precious Metals
Traders currently see about a 75% chance of a rate cut in September, according to the CME Group’s FedWatch Tool. Non-yielding bullion’s appeal tends to grow when interest rates are lower.
Other Metals Performance
Elsewhere, spot silver rose 0.4% to $30.91 per ounce, platinum fell 0.5% to $991.90 and palladium slipped 0.5% to $1,003.75.
(Reporting by Brijesh Patel and Daksh Grover in Bengaluru Editing by Keith Weir)
Insight: The performance of other metals like silver, platinum, and palladium can also provide insights into market sentiment and investor behavior. These metals are often influenced by similar factors as gold, such as interest rates and economic data. Traders often look at the broader precious metals market to assess trends and potential price movements.
