Gold prices were steady in early Asian hours on Tuesday as investors maintained a cautious stance ahead of U.S. inflation data that could influence the Federal Reserve’s rate policy trajectory.
FUNDAMENTALS
* Spot gold held its ground at $1,925.89 per ounce by 0047 GMT. U.S. gold futures were flat at $1,931.30.
* The Fed will likely need to raise interest rates further to bring down inflation that is still too high, but the end to its current monetary policy tightening cycle is getting close, several U.S. central bank officials said on Monday.
* Investors see a 94% chance that the central bank would raise rates in its July meeting into the 5.25-5.5% range, keeping them there until rate cuts could be seen well into 2024, as per CME’s Fedwatch tool.
* Higher rates dampen the appeal of bullion, which pays no interest.
* The focus this week will be on U.S. CPI (Consumer Price Index) data due on Wednesday, with core CPI in June expected to have risen 0.3% month-on-month, as per a Reuters poll. * An increasing number of countries are repatriating gold reserves as protection against the sort of sanctions imposed by the West on Russia, according to an Invesco survey of central bank and sovereign wealth funds published on Monday.
* In other precious metals, spot silver rose 0.1% to $23.13 per ounce, platinum gained 0.4% to $929.95, while palladium was up 0.2% at $1,242.51.
* Palladium fell around 4.3% on Monday, and has lost nearly 31% so far this year as the rapid rise of electric vehicles threatens to hammer demand for the autocatalyst metal amid broader economic weakness.