Gold prices dipped in Asian trading on Monday, consolidating some recent gains as investors turned more cautious ahead of key US inflation data expected later this week.
The yellow metal had gained some ground last week due to signs of a cooling US economy, fueling speculation about potential interest rate cuts by the Federal Reserve in 2024. However, gold remains well below its record highs reached in April and is forecast to trade within a range until the release of this week’s inflation data.
Spot gold fell 0.1% to $2,357.35 per ounce, while June gold futures slipped 0.5% to $2,363.65 per ounce by 11:55 PM ET (03:55 GMT).
Gold and Metals Markets on Edge Before Inflation Data
Both gold and broader metals markets are on edge as they await key US inflation data scheduled for release this week. The Producer Price Index (PPI) data for April is set for release on Tuesday, followed by the more closely watched Consumer Price Index (CPI) data on Wednesday.
Any indication of persistent inflation could further dampen expectations of US rate cuts this year, potentially strengthening the dollar and putting downward pressure on metal prices. The dollar has stabilized after recent volatility, although data from Friday showed a significant decline in US consumer confidence for May, with inflation projections remaining elevated for next year.
Broader Precious Metal Prices Under Pressure
Similar to gold, broader precious metal prices are also under pressure ahead of the upcoming inflation data due to the increased opportunity cost of holding non-yielding assets like metals when interest rates are expected to rise and remain high for a longer period.
Platinum futures remained flat at $1,005.05 per ounce, while silver futures dropped 0.8% to $28.288 per ounce.
Copper Prices Rise on Mixed Cues from China
Among industrial metals, copper prices climbed on Monday, holding near two-year highs despite some optimism stemming from tighter market conditions. However, further gains were restricted by mixed signals from China, the world’s top metals importer.
Three-month copper futures on the London Metal Exchange (LME) rose 0.3% to $10,080.50 per tonne, while one-month copper futures edged up 0.2% to $4.6630 per pound.
Chinese inflation data released over the weekend showed a slight increase in CPI inflation. However, PPI inflation, a key indicator of local factory and business activity, contracted for the 19th consecutive month.
The mixed inflation data was countered by Beijing’s move to ease further restrictions on the struggling property sector, potentially supporting copper demand in the coming months.
