Gold prices steady before US data, poised for fourth consecutive monthly increase

Gold Prices Set for Fourth Monthly Gain

Gold prices are on track for their fourth consecutive monthly gain, despite struggling for momentum on Friday. This comes ahead of a key U.S. inflation reading that could offer insights into the Federal Reserve’s plans for rate cuts later this year.

The current spot gold price is stable at $2,343.04 per ounce, with a 0.3% increase for the week and a 2.5% increase for the month so far. U.S. gold futures have fallen by 0.2% to $2,341.40.

Insight: Central Bank Buying and Geopolitical Risks Driving Gains
Financial market analyst Kyle Rodda believes that the recent gains in gold prices are driven by central bank buying and lingering geopolitical risks.

Market Anticipation for U.S. Inflation Data
Investors are eagerly awaiting the release of the U.S. core Personal Consumption Expenditures (PCE) price index data, the Fed’s preferred measure for inflation, later in the day. This data will play a significant role in shaping market sentiment and the Fed’s future policy decisions.

Insight: U.S. GDP Data Impact on Gold Prices
IG market strategist Yeap Jun Rong commented on how a weaker U.S. GDP reading could prompt policy easing, but the extent of inflation progress remains a key factor for gold prices.

Economic Growth and Rate Expectations
Recent data showing slower economic growth in the U.S. has led to a dialing back of rate-cut expectations among traders. Fed officials’ hawkish tone indicates a longer path to reach the 2% inflation target.

Spot Silver and Other Precious Metals
While spot silver dipped by 0.8% to $30.95 per ounce, it is on track for its biggest monthly gain since July 2020. Platinum and palladium prices also saw slight decreases, with Nornickel projecting a global deficit of 0.9 million ounces for palladium in 2024.

Insight: Impact of Higher Rates on Gold Prices
Although gold is often considered a hedge against inflation, higher rates can increase the opportunity cost of holding non-yielding assets like gold.

In conclusion, the outlook for gold prices remains uncertain as market participants await crucial economic data releases and monitor central bank policies and geopolitical developments.