Gold prices edged lower on Tuesday as the US dollar climbed, while investors looked forward to key economic data this week for signs on how long the interest rates could keep rising to quell sticky inflation.
Spot gold was down 0.1% at $1,961.49 per ounce by 0343 GMT, while US gold futures dropped 0.5% to $1,961.10 per ounce.
Gold prices ended July 2.3% higher, the biggest monthly rise in four months on expectations that an end to the rate-hiking cycle by global central banks was nearing.
Lower rates boost demand for zero-yield bullion.
“The rally is running into technical resistance and recent comments by Jerome Powell are a reminder that the market may have taken a few soft US data points and run with them,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
Chicago Federal Reserve President Austan Goolsbee on Monday said the central bank was “walking the line pretty well” on bringing inflation down without causing a recession and will watch the data to judge if more monetary tightening may be appropriate in September.
“Inflation is coming down but the question is whether the disinflation process is happening fast enough for central bankers around the globe.
This is why the central banks are sticking with the data-dependant mantra,“ said Tim Waterer, chief market analyst at KCM Trade.
US employment data later this week will be a key marker for interest rate expectations from the Fed and any upside surprises could remind traders that a further rate hike remains a possibility, which would weigh on gold, Waterer added.
Gold set for monthly gain as end to rate-hike cycle looms
The dollar strengthened after a Fed survey showed US banks reported tighter credit standards and weaker loan demand from both businesses and consumers during the second quarter.
Among other precious metals, spot silver slipped 0.5% to $24.64 an ounce.
Platinum fell 0.3% to $946.47 and palladium dipped 0.6% to $1,274.54.
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