Gold prices trade near one-month high, US data raises bets for a rate cut by the Fed

Gold spot prices on Monday inched up to a one-month high before seeing a decline of 0.6% to $2,377 due to profit-. Gold has seen a recent rally in its price due to rising bets that the United States Federal Reserve will cut interest rates in September.

Additionally, recent data showed that the U.S. unemployment rate was at its highest in two-and-a-half years at 4.1%. The Initial Jobless claims filed by individuals to seek benefits from the states came in at 2,38,000.

Following the job data, investors have raised expectations that the Fed will cut interest rates in September and further rate cuts in December. The personal consumption expenditures (PCE) data for the month of May added to the expectations of upcoming rate cuts.

Investors will have their eyes on the U.S. Consumer Price Index data for the month of June as it will give further insights into the Fed’s trajectory for interest rates. The headline inflation is expected to ease from 3.3% to 3.1% while core inflation is expected to be steady at 3.4%.

A dovish stance by Jerome Powell, the chairman of the Federal Reserve, could push gold prices higher. As interest rates lower, gold becomes an attractive bet for investors due to a lower opportunity cost.

Meanwhile, China’s central bank paused gold purchases for their reserve for a second consecutive month in June.

Among other metals, silver saw weakness as its spot price fell nearly 1% to $30.90 while spot platinum slid 1.18% to $1,014.60

On Monday, gold futures expiring in August, on the Multi Commodity Exchange (MCX) were trading lower by 0.33% at ₹72,810. On Friday, the contracts gained nearly 1% and closed the session at ₹73,051. The metal had hit a one-month-high of ₹73,516 and a 52-week high of ₹74,442.