Gold prices in Asian trade on Monday retreated slightly after recent gains, as traders shifted towards the dollar in anticipation of key U.S. inflation data later in the week. Last week, the yellow metal showed strength due to signs of a slowing U.S. economy, leading to speculation about potential interest rate cuts by the Federal Reserve in 2024. However, gold prices remained below the record highs reached in April and are expected to trade within a range before this week’s inflation data. Spot gold decreased by 0.1% to $2,357.35 per ounce, while gold futures expiring in June dropped by 0.5% to $2,363.65 per ounce by 23:55 ET (03:55 GMT).
Gold and other metal markets were cautious ahead of the upcoming U.S. inflation reports. The Producer Price Index data for April is scheduled for release on Tuesday, followed by the more significant Consumer Price Index data on Wednesday. Any signs of persistent inflation are likely to reduce expectations of U.S. interest rate cuts for the year, strengthening the dollar and impacting metal prices. The U.S. dollar stabilized following recent fluctuations, with data indicating a substantial decline in consumer confidence in May but sustained high inflation expectations for the next year. Precious metal prices, including platinum futures at $1,005.05 per ounce and silver futures down by 0.8% to $28.288 per ounce, also faced pressure ahead of the inflation reports, as prolonged high-interest rates increase the cost of investing in metal markets.
In the industrial metals sector, copper prices rose slightly on Monday, remaining near two-year highs due to positive sentiment about tighter markets. However, gains were limited by mixed signals from China, the largest importer. Three-month copper futures on the London Metal Exchange increased by 0.3% to $10,080.50 per ton, while one-month copper futures rose by 0.2% to $4.6630 per pound. Chinese inflation data released during the weekend showed an increase in Consumer Price Index inflation, but the Producer Price Index – a crucial indicator of local factory and business activity – declined for the 19th consecutive month. Despite these mixed signals, Beijing’s decision to relax more restrictions on the struggling property sector could potentially boost copper demand in the coming months.
