On Monday, gold prices were unchanged as investors focused on a crucial U.S. inflation report that may impact the Federal Reserve’s subsequent interest rate rise.
As of 0524 GMT, spot gold was unchanged at $1,714.41 per ounce.
At $1,725.00, U.S. gold futures were down 0.2%.
According to Clifford Bennett, chief economist at ACY Securities, “there is still some residual overall de-leveraging downward pressure on gold, but this week’s inflation report may bring some respite.”
“It would be good for the gold market if further proof was that inflation may have peaked. Even if the Fed keeps raising rates, the possibility that there may be a stop in sight might be enough to push gold back up after recent steep falls.”
Ahead of the central bank’s policy meeting on September 20–21, Fed officials closed the public comment session on Friday with vociferous requests for another disproportionate rate rise to combat sky-high inflation.
The markets are overwhelmingly anticipating a 75 basis point rate increase from the Fed this month.
The opportunity cost of keeping non-yielding bullion increases with higher interest rates, strengthening the dollar, the unit of exchange for gold.
On Friday, the dollar index was trading around its lowest point since August 30. [USD/]
According to sources who spoke to Reuters, policymakers at the European Central Bank are concerned that they may need to raise their benchmark interest rate to 2%.
Wang Tao, a technical analyst for Reuters, predicts that spot gold will advance toward $1,729 after breaking over a barrier at $1,720.
Following a session-high price of $18.91 per ounce, spot silver increased 0.7% to reach that level.
Palladium fell 0.5% to $2,161.17 while platinum fell 0.6% to $875.49.