Gold Slips as Investors Take Profits Ahead of US Inflation Data

Gold prices fell on Monday as investors took profits after bullion reached a seven-week high in the previous session.

Spot gold declined 0.5 per cent to $4,322.28 per ounce by 0200 GMT, while US gold futures slipped 0.4 per cent to $4,381.60. Prices had climbed to their highest level since 17 June on Friday after weaker-than-expected US jobs data.

“Gold is ⁠edging slightly lower as it succumbs to some profit-taking following last week’s strong NFP-inspired gains. This looks like a natural stabilization rather than a meaningful shift in sentiment – I expect gold to remain supported above the $4,300 level in the near term,” said Tim Waterer, chief market analyst at KCM Trade.

US data showed the economy unexpectedly lost jobs in July, while employment gains reported for the previous two months were revised sharply lower. The figures increased expectations that the Federal Reserve could keep interest rates unchanged at its September meeting.

Lower interest rates generally support gold prices because bullion does not generate interest, making it more attractive compared with income-producing assets.

Investors are now awaiting key US inflation figures, with the Consumer Price Index (CPI) due on Wednesday and the Producer Price Index (PPI) scheduled for Thursday.

“Soft readings would strengthen the case for a rate hold and clear a path for further upside in gold… Middle East uncertainty remains a lingering risk factor, as any renewed escalation that drives oil prices up could quickly pressure the metal,” Waterer said.

Geopolitical developments also remain in focus. Iran said it was close to a final agreement with Oman on new shipping lanes through the Strait of Hormuz, while maintaining that the US must meet several conditions before the waterway reopens.

Elsewhere, silver fell 0.2 per cent to $63.45 an ounce, platinum lost 0.1 per cent to $1,742.50, and palladium declined 1.1 per cent to $1,362.97.

For now, gold prices remain supported above $4,300, but upcoming US inflation data could determine the metal’s next major move.

Will softer US inflation figures give gold prices fresh momentum this week?