Mumbai, 1 Jul (Commoditiescontrol): Gold prices held steady on Monday after U.S. inflation data showed signs of subsiding, raising hopes that the Federal Reserve might start cutting interest rates this year. Spot gold rose by 0.1% to $2,327.12 per ounce, maintaining a significant gain of over 4% for the second quarter. Conversely, U.S. gold futures edged down 0.1% to $2,336.60 per ounce.
The stability in gold prices came after the release of the personal consumption expenditures (PCE) index on Friday, which showed an increase of 2.6% in May, slightly down from April's 2.7% rise. These inflation readings were consistent with economists' expectations, indicating a potential easing of inflationary pressures.
According to the CME FedWatch tool, traders are now pricing in a 63% chance of an interest rate cut by September. Lower interest rates typically benefit gold as they reduce the opportunity cost of holding the non-yielding asset.
The market's attention is now turning to upcoming remarks from Federal Reserve Chair Jerome Powell on Tuesday, the release of the Fed's latest policy meeting minutes on Wednesday, and crucial U.S. labor market data later in the week. These events are expected to provide further insight into the Fed's monetary policy trajectory.
In other precious metals, spot silver remained flat at $29.12 per ounce. Platinum experienced a slight decline of 0.2%, settling at $990.90 per ounce, while palladium rose by 1.1% to $982.62 per ounce.
The broader metals market is also reacting to economic indicators from China, a major consumer of these commodities. An official survey revealed that China's manufacturing activity declined for the second consecutive month in June, with services activity also slowing. This downturn in China's economic activity may influence global demand for metals.
Overall, the gold market remains stable as traders anticipate potential rate cuts and closely monitor key economic data and Federal Reserve communications in the coming days.
(By Commoditiescontrol Bureau: 09820130172)
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