Gold prices edged lower on Friday but were set for a third straight quarterly rise as investors awaited U.S. inflation data due later in the day for more clarity on the Federal Reserve’s interest rate cut timing.
Spot gold GOLD It fell 0.2%, to $2,323.53 per ounce, at 0536 GMT. Prices have risen around 4% in the quarter.
US gold futures 
GOLD fell 0.1% to $2,334.50.
“Gold has risen in the quarter, largely because the prospects for monetary easing in the US have increased. (…) China also bought large amounts of gold for its reserves, which helped provide support in the second quarter,” said Ilya Spivak, head of global macro at Tastylive.
After increasing its gold reserves for 18 consecutive months, official data from the People’s Bank of China showed its holdings remained stable in May. However, according to a survey by the World Gold Council, more central banks are likely to increase their gold reserves within 12 months.
Gold rose more than 1% in the previous session after data showed a continued, albeit moderate, slowdown in US economic activity. The market currently sees a 64% chance of a first Fed cut in September, according to CME’s FedWatch tool.
However, Fed Governor Michelle Bowman reiterated on Thursday that she is not yet prepared to support a central bank rate cut as inflationary pressures remain high.
The US personal consumption price index (PCE) – the Federal Reserve’s preferred measure of inflation – will be released at 1230 GMT.
According to City Index analyst Matt Simpson, a series of soft PCE numbers is needed to keep Fed easing hopes alive and further support gold. (FEDWATCH)
Although gold is considered a hedge against inflation, higher rates increase the opportunity cost of holding this non-yielding asset.
Silver in cash 
XAGUSD1! advanced 0.1%, to $29.09, and platinum 
PL1! it gained 0.8%, to $995.13. Both metals posted quarterly gains.
Palladium Spot 
XPDUSD1! were up 1.6% at $944.63.
