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HomeLatestGold Prices Dip as US Inflation Test Looms

Gold Prices Dip as US Inflation Test Looms

Gold prices experienced a retreat in Asian trading on Monday, as traders exhibited a preference for the dollar ahead of crucial U.S. inflation data scheduled later in the week.


Last week, the yellow metal showed some resilience, bolstered by indications of a cooling U.S. economy, prompting speculation about potential interest rate cuts by the Federal Reserve in 2024. However, gold remained notably below its peak levels reached in April and is anticipated to trade within a narrow range leading up to this week’s inflation figures.


Spot gold declined by 0.1% to $2,357.35 per ounce, while gold futures for June delivery retreated by 0.5% to $2,363.65 per ounce by 23:55 ET (03:55 GMT).


The gold and broader metal markets remained on edge as investors awaited key U.S. inflation data. Tuesday will see the release of the producer price index data for April, followed by the more closely watched consumer price index data on Wednesday. Any indications of persistent inflation are likely to dampen expectations of U.S. interest rate cuts for the year, thereby bolstering the dollar and exerting pressure on metal prices.

Following recent volatility, the greenback stabilized. Friday’s data revealed a substantial weakening in U.S. consumer confidence for May, although inflation projections for the upcoming year remained elevated.

Broader precious metal prices faced downward pressure ahead of this week’s inflation readings, with prolonged higher interest rates increasing the opportunity cost of investing in metal markets.

Platinum futures steadied at $1,005.05 per ounce, while silver futures dipped by 0.8% to $28.288 per ounce.

In industrial metals, copper prices edged higher on Monday, hovering near two-year highs amid optimism surrounding tighter markets. However, further gains were tempered by mixed signals from China, the leading importer.

Three-month copper futures on the London Metal Exchange rose by 0.3% to $10,080.50 per ton, while one-month copper futures increased by 0.2% to $4.6630 per pound.

Chinese inflation data released over the weekend revealed an uptick in CPI inflation, while PPI inflation, a crucial indicator of local factory and business activity, contracted for the 19th consecutive month. Despite the mixed inflation readings, Beijing’s relaxation of restrictions on the property sector could potentially bolster copper demand in the forthcoming months.