Mumbai, 9 Sep (Commoditiescontrol): Gold prices remained stable on Monday, hovering just below the critical $2,500 per ounce mark, as investors awaited August inflation data for clues on the Federal Reserve's next move on interest rates. Spot gold was nearly unchanged at $2,497.53 per ounce, while U.S. gold futures inched up 0.1% to $2,526.40.
Friday's employment report revealed that nonfarm payrolls increased by 142,000 in August, following a downward revision of July's figures to 89,000. This fell short of economists' expectations of a 160,000-job increase, raising speculation about the Fed's upcoming interest rate decisions.
Fed officials have indicated that a series of rate cuts could begin at their upcoming meeting in mid-September, with a quarter-point reduction being the most likely outcome. However, if the labor market shows further signs of weakening, larger cuts may be considered. According to the CME FedWatch Tool, traders now see a 71% probability of a 25 basis point cut and a 29% chance of a 50 basis point reduction.
A lower interest rate environment generally enhances the appeal of non-yielding assets like gold. This week's focus will be on the U.S. Consumer Price Index (CPI) data due Wednesday, followed by the Producer Price Index (PPI) on Thursday, as these reports could influence the Fed's decision.
In other developments, China's central bank did not add to its gold reserves for the fourth consecutive month in August, as per official data. Meanwhile, in India, gold discounts surged to a seven-week high due to rising prices, which dampened demand. Analysts and traders expect Asian consumers to take advantage of any price declines.
Among other precious metals, spot silver rose 0.3% to $28.01 per ounce, platinum increased 0.3% to $924.02, and palladium gained nearly 1% to $919.76.
(By Commoditiescontrol Bureau: 09820130172)
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