BENGALURU- Gold prices fell on Tuesday with investors awaiting key US inflation data and the outcome of the Federal Reserve’s policy meeting for details of the central bank’s plans to cut interest rates against its inflation target.
Spot gold was down 0.3 percent at $2,302.89 per ounce. US gold futures fell 0.3 percent to $2,320.20.
“I suspect the Fed’s hands are tied following the strong payrolls report, as it likely doesn’t enable them to signal the September cut that traders desperately want to hear. And that could see gold take another dent or two amid rising yields and the US dollar,” said City Index senior analyst Matt Simpson.
The May consumer price index (CPI) inflation report due on Wednesday will be the next major data point along with the Fed concluding their two-day meeting on the same day.
“The fact that we’ll see inflation data just hours ahead of the Fed’s interest rate decision means we might see a last-minute panic and elevated levels of volatility should inflation come in hot,” Simpson said.
Updated economic projections from Fed officials this week are expected to show fewer interest rate cuts than policymakers anticipated three months ago amid unexpectedly sturdy inflation.
