Gold prices edged lower in early Asian trade on Monday, pushed down by a stronger US dollar and as chances of more interest rate hikes by the Federal Reserve weighed on bullion’s appeal.
Spot gold fell 0.2 percent to $1,915.29 per ounce while US gold futures fell 0.3 percent to $1,923.10.
“Over the near term, I suspect a pullback towards the $1,910-$1,913 area will be snapped up and bulls will try and target the highs around $1,937,” said Matt Simpson, senior market analyst at City Index.
Simpson said buying from bargain hunters could be supporting gold.
While stagnant US consumer spending in May suggested the Fed’s rate hikes to tame inflation were slowly working, the core PCE price index, which excludes food and energy prices and is the Fed’s preferred measure of inflation, increased 4.6 percent year-on-year, after advancing 4.7 percent in April.
“The conditions appear ripe for gold to extend its bounce from the $1,900 area,” Simpson added.
Investors see an 87 percent chance of a 25 basis points hike in July, according to CME’s Fedwatch tool, and they expect rates to stay in the 5.25 percent-5.5 percent range before decreasing in 2024. – Reuters
