- Gold prices were steady in early trade on Monday, after falling 1% in the previous session, as U.S. inflation data suggested the Federal Reserve is likely to cut interest rates less than expected this month.
- The price of the precious metal settled in spot transactions at $2,502.89 per ounce, after recording the lowest level in the session at $2,494.15, while US gold futures rose by 0.3% to $2,535 per ounce.
- Data released Friday showed that U.S. consumer spending rose strongly in July, contradicting the Federal Reserve’s half-point interest rate cut this month. The personal consumption expenditures price index rose 0.2% last month, in line with expectations, after an unrevised 0.1% gain in June.
- Non-yielding gold prices tend to rise when interest rates are low.
- The US central bank is expected to begin its rate-cutting cycle at its monetary policy meeting on September 17-18.
- Traders currently see a 67% chance of a 25 basis point rate cut this month and a 33% chance of a 50 basis point cut, according to the CME FedWatch tool.
- Among other precious metals, spot silver rose 0.2% to $28.89 an ounce, platinum was almost flat at $926.80 an ounce, and palladium rose 0.3% to $968.18 an ounce, according to Reuters data.
