Gold prices were unchanged on Monday, while U.S. Treasury yields remained firm and investors turned cautious ahead of key economic data that could shed light on the Federal Reserve’s potential rate-cutting trajectory.
Spot gold was almost unchanged at $2,327.50 per ounce, at 0932 GMT. Prices posted a gain of more than 4% in the second quarter. U.S. gold futures fell 0.1% to $2,337.80.
The benchmark 10-year U.S. Treasury yield hit a nearly three-week high, making the unprofitable metal less attractive to investors.
Investors’ attention now turns to remarks from Fed Chair Jerome Powell on Tuesday, followed by minutes from the Fed’s latest policy meeting on Wednesday and U.S. nonfarm payrolls data due on Friday.
“Powell will likely stick to a data-dependent stance, so if the payrolls data later this week are softer, it could lift gold prices again,” said Giovanni Staunovo, an analyst at UBS, adding that gold will rise to $2,600 by the end of the year, boosted by the Fed’s rate cuts.
Data last week showed that U.S. prices remained unchanged in May, while consumer spending rose modestly.
The market now sees a 63% chance that the Fed will cut interest rates in September and another cut in December.
“The upside is likely also limited today by the outcome of the French elections, which will support the euro and the French stock market,” said UBS’s Staunovo.
The euro jumped after a convincing and historic victory for the French far right in the first round of parliamentary elections.
“Gold’s rebound from $2,300 an ounce last week was a bullish signal in and of itself… This suggests that buyers are willing to enter the market at sub-$2,300 levels,” Kinesis Money said in a note.
Spot silver rose 0.2% to $29.19, platinum fell 1.1% to $982.05 and palladium gained 1.3% to $984.75.
