Gold prices fell on Monday ahead of more US economic data, while reports last week showed inflation stabilizing and raised hopes that the Federal Reserve will cut interest rates later in the year .
Spot gold was down 0.4% at $2,322.24 per ounce at 0320 GMT, after rising more than 1% on Friday. U.S. gold futures fell 0.5% to $2,337.10.
“The little move today is probably just a little bit of an unwinding of the move we saw on Friday,” said Kyle Rodda, financial markets analyst at Capital.com, adding that long-term fundamentals are very constructive for gold , but they depend on the data.
US retail sales data is due on Tuesday, weekly jobless claims on Thursday and flash PMIs on Friday. Several Fed officials are also expected to speak this week.
“With some signs of weakness emerging in the US economy, which could weaken the US dollar and raise expectations for rate cuts in the future, gold is in a great position to benefit,” Rodda added.
Data released last week showed weakening price pressure in the United States, suggesting the labor market is losing momentum, keeping hopes of a rate cut alive in September.
Traders see a 68% chance of a cut in September, according to CME Group’s FedWatch tool, compared with 63% before Thursday’s producer price data.
However, Minneapolis Fed President Neel Kashkari said on Sunday that it is a “reasonable prediction” that the US central bank will cut interest rates once this year, waiting until December to do so.
Lower interest rates reduce the opportunity cost of holding unprofitable bullion.
In other metals, spot silver fell 1.1% to $29.21 an ounce, platinum fell 0.1% to $957.00 and palladium held steady at $889.93 .
