Sunday, July 7, 2024

Gold Prices Rise Slightly Amid U.S. Inflation Focus

June 24 (Reuters) – Gold prices edged higher on Monday, bolstered by a decline in U.S. Treasury yields, while market attention remained fixed on upcoming inflation data that could sway the Federal Reserve’s interest rate decisions.

Spot gold rose by 0.4% to $2,330.56 per ounce as of 0834 GMT, recovering from a 1% drop on Friday influenced by a stronger dollar. U.S. gold futures also gained 0.5% to reach $2,343.30.

UBS analyst Giovanni Staunovo highlighted the significance of upcoming U.S. economic data, suggesting that if it confirms a soft economic landing, it could pave the way for Fed interest rate cuts. Staunovo maintained a bullish outlook, forecasting a year-end target of $2,600 per ounce for gold.

Investors are closely monitoring the release of Personal Consumption Expenditures (PCE) data on Friday, the Fed’s preferred gauge of inflation. Additionally, this week will see statements from several Fed officials, potentially providing further insight into monetary policy direction.

Market sentiment currently reflects a 66% probability of a Fed rate cut in September, as indicated by the CME FedWatch Tool, underpinned by expectations that lower rates would reduce the opportunity cost of holding gold.

Meanwhile, geopolitical tensions persisted as eight Palestinians were killed in an Israeli airstrike on a Gaza City training college used for aid distribution.

In the broader precious metals market, spot silver increased by 0.5% to $29.68 per ounce, while platinum gained 0.6% to $998.35. Palladium notably surged by 4.6% to $992.53, reaching a one-month high in volatile trading driven by short-covering and tight physical supply conditions.

For more updates and developments in the gold and precious metals markets, stay tuned to Reuters.

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