Gold prices edged up on Monday after data showed a deeper downturn in euro zone business activity, but moves were limited as investors look ahead to a widely anticipated interest rate hike from the US Federal Reserve this week.
Spot gold was up 0.2 per cent to $1,964.63 per ounce at 1045 GMT. US gold futures for August delivery were unchanged at $1,966.50, reports Reuters.
Gold prices in euros hit their highest since July 5 after data showed euro zone business activity shrank much more than expected in July as demand in the services industry declined while factory output fell.
The dollar index inched 0.1 per cent higher, limiting gold's upside as a stronger dollar makes the metal more expensive for holders of other currencies.
Bullion will trade around current levels until there is further clarity on policy guidance from the statement accompanying the upcoming Fed meeting, said UBS analyst Giovanni Staunovo.
The Fed will announce its interest rate decision on Wednesday, followed by the European Central Bank on Thursday, with both seen hiking rates.
Gold is highly sensitive to rising interest rates as they increase the opportunity cost of holding non-yielding bullion.
"Any dovish surprise, particularly from the Fed, could be positive for gold, with good chances of seeing a new attack to the $2,000 mark," said Carlo Alberto De Casa, market analyst at Kinesis Money, in an note.
Traders are also awaiting second-quarter U.S. GDP data on Thursday, followed by the June personal consumption expenditures (PCE) index due on Friday.
© 2025 - All Rights with The Financial Express
