On Monday, gold prices fell slightly as the dollar rose, although investors largely expected the U.S. Federal Reserve to eventually stop raising interest rates.
By 0307 GMT, spot gold was down 0.1% to $1,952.74 per ounce, around $11 below the three-month peak reached on Friday.
To $1,957.60, U.S. gold futures were down 0.4%.
For holders of foreign currencies, gold became more expensive as the dollar lingered above its April 2022 lows. [USD/]
“Gold’s post-CPI rally has paused for breath, and that leaves the potential for a technically-driven retracement to the $1,940-$1,950 region,” stated Matt Simpson, a senior market analyst at City Index.
Consumer prices rose at their slowest rate in more than two years last week, which provided data in the US that suggested a disinflationary trend.
“Markets are responding to the relative change over the absolute level of interest rates moving forward, even while inflation is still high. Along with central bank buying, peak cycles are another factor that supports gold, according to Simpson.
The Federal Reserve and the European Central Bank are both expected to raise interest rates next week. According to the markets, the U.S. central bank will likely finish raising rates before cutting them in 2019.
The opportunity cost of owning non-yielding bullion is reduced as interest rates decline.
top consumer of gold, China’s economy expanded at a sluggish rate in the second quarter, rising 0.8% from the previous quarter’s 2.2% expansion, as markets anticipated further stimulus measures from the government.
Typhoon Talim forced the Hong Kong Stock Exchange to halt trading, and the Nikkei in Japan was closed for a holiday even though futures were down 0.3%. [MKTS/GLOB]
Palladium dropped 0.6% to $1,263.24, platinum down 0.8% to $963.95, while spot silver dropped 0.6% to $24.78 per ounce.