Gold price set for monthly gain

Gold pared losses and was poised for its best month in four on Monday as top central banks switch to a more cautious posture about further moves in their year-long round of global monetary tightening, reports Reuters.

Spot gold was unchanged at $1,959.50 per ounce by 1132 GMT after slipping as much as 0.5 per cent earlier. US gold futures ticked 0.1 per cent lower to $1,959.30.

After data showed economic growth in Europe nudged higher and inflation ticked lower, a firmer euro and a weaker US dollar helped gold consolidate its recovery in the short term, said Carlo Alberto De Casa, market analyst at Kinesis Money.

Dollar-priced bullion was set to post a 2.1 per cent gain this month, its biggest since March, as bets that US interest rates could be nearing their peak put the dollar on track for a second straight monthly decline.

"We remain in a supportive scenario because there's a recession risk and the expectation that central banks are going to be more dovish next year is the main catalyst supporting the price of gold," De Casa said.

Data on Friday showed annual US inflation rose at its slowest pace in over two years in June, cementing expectations that the Federal Reserve was closer to ending its fastest rate hiking cycle since the 1980s.

Higher interest rates discourage the buying of non-interest-paying bullion.

"Markets feel vindicated with their assessment that Fed rates are at or near their terminal rate, with key inflation reports from the US all pointing towards a faster pace of disinflation," said Matt Simpson, senior analyst at City Index.

Two European Central Bank policymakers on Friday also raised the prospect of an end to its longest string of rate rises.

Other precious metals looked set to post monthly rises, with silver leading at 7.1 per cent, up 0.2 per cent on the day at $24.39 per ounce. Platinum added 0.2 per cent to $936.95 and palladium gained 0.8 per cent to $1,254.98.