Gold edges away from two-week highs

Bengaluru — Gold prices inched lower on Monday pressured by a gaining dollar, but bullion’s losses were cushioned as growing tension in the Middle East supported the safe-haven near last session’s more than two-week highs.

Spot gold was down 0.2% at $2,032.30/oz, at 4.05am GMT. US gold futures edged 0.4% lower to $2,041.5 per ounce.

“Gold has exhibited some mild easing to kickoff the new week mostly due to the dollar ticking higher. However, geopolitical concerns have not dissipated, and this is keeping the yellow metal very much on the radar of investors from a safe-haven standpoint,” Tim Waterer, chief market analyst at KCM Trade, said.

The dollar was on the front foot ahead of a packed week filled with key economic releases that will provide further clues on the global interest rate outlook, with a US inflation reading taking centre stage.

“If solid US macro data continues to create hesitation from the Fed regarding when to cut rates, this could create further headwinds for gold as investors may chase yield elsewhere,” Waterer said.

Market participants’ focus is now shifting to the Fed’s preferred inflation indicator, personal consumption expenditure (PCE) data, which is due on Thursday.

Last week, Fed governor Christopher Waller said he was in “no rush” to cut rates, firming investor bets against US interest rate cuts before June.

Another Fed official sees the US central bank on track to cut interest rates “later this year” despite stronger-than-expected inflation and labour market data in January.

Markets are pricing in a 68% chance of a Fed rate cut in June, according to the CME Fed Watch Tool.

Lower interest rates boost the appeal of holding non-yielding bullion.

In other metals, spot platinum was down 0.9% at $892.08/oz and palladium fell 0.9% to $962.50. Silver lost 0.5% to $22.79/oz.

Reuters