Gold prices dip as traders await US inflation data for Fed rate cut cues
Friday, 30 August 2024
SINGAPORE, Aug 29 (Reuters): Gold prices fell 1 per cent on Monday on profit-taking, as investors looked forward to key inflation figures this week for clues on the US interest rate cuts this year.
Spot gold fell 1 per cent to $2,336.76 per ounce by 1745 GMT. It had hit its highest level since April 22 on Friday.
US gold futures settled 1.3 per cent lower at $2,343.
"This could be some people exiting the gold market prior to some of these risk events such as (Fed chief) Jerome Powell speaking, PPI and CPI all coming out this week," said Phillip Streible, chief market strategist at Blue Line Futures.
"Gold bulls are rightfully concerned that the Federal Reserve needs weaker inflation data, not just weaker employment figures, to justify cutting rates," said Tai Wong, a New York-based independent metals trader.
The yellow metal had risen more than 1 per cent last week, following weak jobs data, supporting bets of a US rate cut this year.
A stronger majority of economists polled by Reuters expect the Fed to cut its key interest rate twice this year, starting in September.
Traders are now pricing in about a 63 per cent chance of a rate cut in September, according to the CME FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding gold.
Markets focus this week will be on the US Producer Price Index (PPI) data on Tuesday, followed by the Consumer Price Index (CPI) data due on Wednesday.
Among other precious metals, spot silver gained 0.3 per cent to $28.23 per ounce, while palladium fell 1.7 per cent to $961.50.
Platinum rose above the key level of $1,000 per ounce to a near one-year high. It was up 0.6 per cent at $1,000.55 per ounce.
However, consultancy Metals Focus expects average prices for platinum and palladium to fall this year compared with 2023 despite another year of structural deficit.
BHP Group, the world's largest listed miner, said Anglo American has rejected a revised buyout offer valuing the company at 34 billion pounds ($42.67 billion).