Gold prices slide

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FE Team | Published: May 13, 2024 23:33:57

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Gold prices declined on Monday as investors awaited key US inflation data, which could shed light on the timing of the Federal Reserve's first rate cut, reports Reuters.
Spot gold was down 0.7 per cent at $2,344.53 per ounce by 1204 GMT after hitting its highest level since April 22 on Friday. It was headed for its biggest daily decline in nearly two weeks.
US gold futures fell about 1 per cent to $2,350.80.
"Probably some profit-taking ahead of the important CPI data this week is weighing on gold prices today. To see a further uptick in gold prices, there needs to be a clear slowdown in inflation readings," UBS analyst Giovanni Staunovo said.
"I would expect gold prices to stay supported around current levels, with modest downside," Staunovo added.
US producer price index (PPI) data is expected on Tuesday, followed by the consumer price index (CPI) on Wednesday.
Median forecasts are for April core consumer prices to rise 0.3 per cent, compared with 0.4 per cent in March, pulling the annual rate down to 3.6 per cent, according to a Reuters poll.
Gold rose over 1 per cent last week following weak jobs data, supporting bets of a US rate cut this year.
Traders are pricing in about a 63 per cent chance of a cut in September, according to the CME FedWatch Tool,
Lower interest rates reduce the opportunity cost of holding non-yielding gold.
Debate among Fed officials intensified last week over whether US rates are sufficiently high.
Meanwhile, Federal Reserve Bank of Minneapolis President Neel Kashkari said on Friday that the current state of the economy means he is not sure what's next in terms of monetary policy.
Among other precious metals, spot silver gained 0.4 per cent to $28.27 per ounce, platinum was up 0.9 per cent to $1,002.65 and palladium rose 0.5 per cent to $982.75.