Gold futures settled slightly lower on Monday with traders largely making cautious moves, looking ahead to U.S. consumer price inflation data, due later in the week.
The inflation data may have a considerable impact on the outlook for interest rates following last week’s mixed monthly jobs report.
The annual rate of growth by core consumer prices, which exclude food and energy prices, is expected to slow to 5% from 5.3%.
Ahead of the inflation data, CME Group’s FedWatch Tool is indicating a 92.4% chance of another quarter point rate hike at the next Fed meeting later this month.
A weak dollar helped limit gold’s downside. The dollar index dropped to 102.02, losing about 0.25%.
Gold futures for August ended lower by $1.50 at $1,931.00 an ounce.
Silver futures for September ended higher by $0.056 at $23.345 an ounce, while Copper futures for September settled at $3.7845 per pound, gaining $0.0025.
“Gold prices are hovering last week’s low as traders await a pivotal inflation report that seals the deal for a couple more Fed rate hikes,” says Edward Moya, Senior Market Analyst at OANDA. “Bullion traders want to know if core CPI will show persistence and raise the odds that the Fed will not just go in July but more likely also in September.”
“Gold might end up trading rangebound this week, but the $1900 level should hold as long as Wednesday’s inflation report is not scorching hot,” Moya adds.
In U.S. economic news, data released by the Commerce Department showed wholesale inventories were virtually unchanged in May after falling by a revised 0.3% in April.
Economists had expected wholesale inventories to edge down by 0.1%, matching the dip originally reported for the previous month.
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