NEW YORK: Gold edged lower on Monday as a firmer US dollar pressured prices, while investors awaited key US inflation data that could shape expectations for the Federal Reserve’s policy moves.
Spot gold slid 0.2percent to USD4,335.27 per ounce by 09:33 a.m. EDT (1333 GMT). It hit its highest level since June 17 on Friday after an unexpected drop in US nonfarm payrolls.
US gold futures dipped 0.1percent to USD4,394.00. “Gold is pressured by the firm dollar index and is kind of at a pause today ahead of key inflation report that is out later this week,” said Jim Wyckoff, a market analyst at American Gold Exchange.
The US dollar index gained 0.2percent, making dollar-priced bullion more expensive for buyers overseas.
Investors await the US consumer price data due on Wednesday and producer price data on Thursday for clues on the Fed’s interest-rate outlook. Economists polled by Reuters expect the July consumer price index to have risen 3.4percent year-on-year, versus 3.5percent in June. “The CPI data is going to be important.
Inflation is starting to cool a little bit, with markets expecting a report that’s not going to be hot on inflation, and will lead to gold trading sideways to higher in the near term.” Data last week showed the US economy unexpectedly shed jobs in July, while previously reported job gains for the prior two months were revised sharply lower, tempering financial market expectations of a rate hike from the Fed next month.
Still, traders are pricing in a 46percent chance of a rate hike in September and a 79percent chance in December, according to the CME FedWatch Tool.
Bullion is generally less attractive in a high-interest-rate environment because of its non-yielding characteristic. Meanwhile, Iran said it was nearing a final pact with Oman defining new shipping lanes between them through the Strait of Hormuz, but repeated that the US must meet other conditions before the strategic waterway is reopened.
Among other metals, spot silver rose 0.6percent to USD63.96 per ounce, platinum dropped 0.5percent to USD1,736.45, and palladium fell 1percent to USD1,363.50.
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