Gold prices remain stable as traders await key US economic data
(MENAFN) On Monday, Gold prices experienced minimal fluctuation as traders eagerly awaited a series of upcoming US economic reports. These reports are expected to shed more light on the country's economic health and the Federal Reserve's potential monetary policy adjustments. By 07:52 GMT, gold had stabilized at approximately USD2,323.87 per ounce, following a notable rise of about two percent in May. Concurrently, US gold futures saw a slight decline of 0.1 percent, settling at USD2,344.40 per ounce.
Financial markets analyst Kyle Rodda from Capitalcommented on the situation, noting that the forthcoming jobs data would be a significant short-term catalyst for gold prices. If this data indicates a slight slowdown in the labor market, it could positively impact gold prices. Investors are particularly focused on the Purchasing Managers' Index (PMI) data set to be released by the Institute for Supply Management at 14:00 GMT, the employment data expected on Wednesday, and the non-farm payrolls data scheduled for Friday. These reports will provide critical insights into the strength of the US economy and influence whether the central bank might reconsider its stance on cutting interest rates in September.
Rodda further explained that gold has garnered some support due to recent personal consumption expenditures data, which came in slightly lower than expected. This reinforced the notion that the Federal Reserve could feasibly reduce interest rates within the year. Last Friday's data revealed that US inflation had stabilized in April, subsequently increasing speculation that the Federal Reserve would opt for a rate cut in September. Market traders are currently predicting a 53 percent chance of an interest rate reduction in September, up from about 49 percent before the latest data was released.
Gold's role as a hedge against inflation is well-recognized; however, high interest rates tend to elevate the opportunity cost of holding non-yielding assets like gold. The interplay between these economic indicators and gold prices continues to be a focal point for investors as they navigate the market's complexities and anticipate the Federal Reserve's next moves.
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