Gold prices experienced a 1% decline on Monday as investors engaged in profit-taking and awaited key inflation data this week, which may influence U.S. interest rate decisions.
By 17:45 GMT, spot gold was trading at $2,336.76 per ounce, marking a 1% decrease. The precious metal had reached its highest level since April 22 on Friday.
U.S. gold futures also saw a drop, settling 1.3% lower at $2,343 per ounce.
Phillip Streible, chief market strategist at Blue Line Futures, commented, “This decline could be attributed to some market participants liquidating their gold positions ahead of significant events this week, including speeches by Federal Reserve Chairman Jerome Powell and the upcoming Producer Price Index (PPI) and Consumer Price Index (CPI) reports.”
Tai Wong, an independent metals trader based in New York, added, “Gold investors are concerned that the Federal Reserve will require weaker inflation data, not just lower employment figures, to justify any rate cuts.”
Last week, gold prices had risen by more than 1% due to disappointing employment data, which bolstered expectations for a U.S. interest rate cut this year.
A significant majority of economists surveyed by Reuters anticipate that the Federal Reserve will implement two rate cuts this year, with the first expected in September.
Traders are currently pricing in a 63% probability of a rate cut in September, according to the CME FedWatch Tool. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold.
This week, market attention will be focused on the U.S. Producer Price Index (PPI) data, scheduled for Tuesday, followed by the Consumer Price Index (CPI) data on Wednesday.
In other precious metals markets, spot silver edged up 0.3% to $28.23 per ounce, while palladium dropped 1.7% to $961.50 per ounce. Platinum, however, rose above the $1,000 per ounce mark, reaching a near one-year high with a 0.6% increase to $1,000.55 per ounce.
Despite this rise, consultancy Metals Focus predicts that average prices for platinum and palladium will decline this year compared to 2023, despite an ongoing structural deficit.
Additionally, BHP Group, the world’s largest publicly listed miner, announced that Anglo American has declined a revised takeover offer, valuing the company at £34 billion ($42.67 billion).
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