The price of gold steadied near its record high as investors awaited the release of US inflation data, which could provide clues on the Federal Reserve’s future interest rate decisions.
Following eight consecutive days of gains, gold showed signs of wavering on Monday as traders turned their attention to Tuesday’s consumer price index release. Last week, the precious metal surged nearly 5%, achieving nominal highs for four consecutive days. Friday’s gains were bolstered by US data indicating a two-year high in the jobless rate, leading to declines in the dollar and 10-year Treasury yields.
March saw a significant spike in gold prices, catching some investors off guard, despite no major shift in expectations regarding the Fed’s interest rate policy. Federal Reserve Chair Jerome Powell reiterated in congressional testimony last week that the central bank requires “just a bit more evidence” of inflation nearing its 2% target before considering rate cuts, a sentiment echoed by other policymakers.
This week’s release of fresh US inflation data on Tuesday will serve as a crucial test for gold bulls’ optimism. Any unexpected increase in inflation, similar to last month’s readings, could hamper further gains in the precious metal, which typically benefits from a low-rate environment due to its lack of yield.
As of 11:16 a.m. in New York, spot gold edged up by 0.1% to $2,182.05 per ounce, slightly below its peak of $2,195.15 reached last week. Silver, platinum, and palladium also experienced gains during this period.
