Gold holds ahead of US inflation data as market awaits Fed next step

(MENAFN) Gold prices remained steady on Monday as investors eagerly awaited key U.S. inflation data set to be released later in the week, which is expected to provide further insight into the Federal Reserve's potential interest rate decisions for September. Spot gold hovered at USD2,425.94 per ounce in early Asian trading, while U.S. gold futures saw a slight decline of 0.3 percent, settling at USD2,464.80. The upcoming inflation reports, including the Producer Price Index (PPI) on Tuesday and the Consumer Price Index (CPI) on Wednesday, are anticipated to be crucial in shaping market expectations for the Federal Reserve's next move.

Market participants currently foresee a 54 percent likelihood of the Federal Reserve enacting a 50 basis point rate cut in September, according to data from the CME Group's Fed Rate Monitor tool. This expectation comes amid a shift in tone from Fed Governor Michelle Bowman, who has traditionally been known for her hawkish stance. In recent comments, Bowman acknowledged some "welcome" progress in reducing inflation over the past two months. However, she emphasized that inflation remains significantly above the Fed's 2 percent target, and there are ongoing concerns about potential upward pressures on prices, which could influence the central bank's future policy decisions.

In the broader precious metals market, there were mixed movements, reflecting the cautious sentiment among investors. Spot silver experienced a 0.6 percent decline, bringing its price down to USD27.29 per ounce. Meanwhile, platinum saw a modest increase of 0.1 percent, reaching USD923.20 per ounce. Palladium remained largely unchanged, trading at USD905.00 per ounce, as the market continued to assess the potential impact of U.S. inflation data and the Federal Reserve's upcoming policy actions on the prices of these metals.

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