Gold prices inched higher on Monday on US interest rate cut optimism and brewing geopolitical tensions, while traders looked to key US inflation data due later this week for more monetary policy cues, reports Reuters.
Spot gold rose 0.6 per cent to $2,444.79 per ounce as of 1234 GMT. US gold futures gained 0.4 per cent at $2,483.70.
Investors are pricing in a 49 per cent chance of a 50 basis point (bps) rate cut by the Federal Reserve in September, the CME Group's FedWatch, opens new tab tool shows. The US producer and consumer prices numbers due on Tuesday and Wednesday will be scanned for further cues.
"The inflation point, will, in my view, define if it is a 25 bps or 50 bps cut. So the outcome of the inflation data will result in some higher volatility in gold prices," UBS analyst Giovanni Staunovo said.
"For gold to reach a new record high, inflation needs to be below market expectations."
Fed Governor Michelle Bowman on Saturday softened her usually hawkish tone slightly, noting some further "welcome" progress on inflation in the last couple months even as she said inflation remains "uncomfortably above" the Fed's 2 per cent goal.
Heightened geopolitical risk and volatility in other markets remains supportive for gold, Mike Ingram, market analyst at Kinesis Money, said.
Spot silver rose 1.6 per cent to $27.88 per ounce, platinum added 1.8 per cent to $938.70 and palladium was 2.8 per cent higher at $930.85.
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