Gold prices fell on Tuesday as investors await key U.S. inflation data due this week that could offer new clues about how quickly the Federal Reserve may cut interest rates.
BASICS
* Spot gold fell 0.1% and stood at $2,329.64 an ounce, around 0114 GMT. US gold futures also fell 0.1% to $2,342.00.
* Federal Reserve Bank of San Francisco President Mary Daly said Monday that she does not believe the U.S. central bank needs to cut rates before policymakers are confident inflation is heading toward 2%.
* Traders are watching the report on the US core personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, due on Friday, for further clues on the timing and magnitude of rate cuts.
* Investors are also looking forward to comments from Fed officials who will speak this week, including Fed Governors Lisa Cook and Michelle Bowman.
* Traders are currently pricing the probability of a Fed rate cut in September at around 68%, according to CME’s FedWatch tool.
* Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
* In consumer-heavy China, retailers face a bleak near-term future after a disappointing mid-year online shopping festival has also dampened recovery prospects for the world’s second-largest economy.
* London palladium spot prices hit one-month highs and briefly surpassed the key $1,000 per troy ounce level in volatile trading last week, as some investors covered their short positions and the market was tense due to nearby physical supply.
* Spot silver fell 0.3% to $29.53 an ounce, platinum rose 0.7% to $1,001.25 and palladium gained almost 1% to $987.91.
DATA/EVENTS (GMT) 0500 Japan chain sales YY May 1400 US consumer confidence June (Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Sherry Jacob-Phillips)
